FEDERATION INTERNATIONALE DES INGENJEURS-CONSEILS
GUIDETOTHE USE OF FIDIC CONDITIONS OF CONTRACT FOR WORKS OF CIVIL
I
ENGINEERING CONSTRUCTION FOURTH EDITION
First published by Fédération Internationale des Ingénieurs-Conseils (FIDIC)
P0 Box 86 CH 1000 Lausanne 12 Switzerland
TeI.+41 216544411 Publications +41 21 654 44 15
Fax+41 216544417 Copyright FIDIC 1989
All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without permission of the publisher.
U D I C FEDERATION INTERNATIONALE DES INGENIEURS-CONSEILS
GUIDETOTHE USE OF FIDIC CONDITIONS OF CONTRACT
FOR WORKS OF CIVIL
ENGINEERING CONSTRUCTION
FOURTH EDITION
Page blank in original
FOREWORD In 1957 the International Federation of Consulting Engineers (FIDIC) published for the first time a form of standard conditions of contract for works of civil engineering construction especially designed for use in international projects.
Second and third editions were published in 1963 and 1977 respectively.
In 1983 the Executive Committee of FIDIC appointed a drafting committee comprised of members of the Civil Engineering Con-
tracts Committee (CECC) which up to that time had been charged with monitoring the use of the third edition.
The results of the work of the drafting committee were approved in 1987 and the fourth edition of the Conditions of Contract for Works of Civil Engineering Construction was published at the Annual Conference of FIDIC held in Lausanne, Switzerland in September of 1987. There are many important differences between the third and fourth editions and these are dealt with in detail in this Guide which gives a commentary on each clause of the fourth edition. The Executive Conmiittee decided to drop the word 'International' from the title of the document as with slight modification in Part II it is also suitable for domestic contracts.
With the advances in technology of photo-copying it is possible today to produce photo-copies which appear to be true copies of an original document but have in fact been changed without the
alterations being apparent. To counter this, the Part I of the
Conditions has been printed in two colours (black and blue) and FIDIC strongly recommends all users of the Conditions to insist that Part I of the document should be in the form published by FIDIC. The CECC comprised the following members all of whom played an active role in the preparation of the fourth edition, Messrs. H. Sørensen (Denmark) Chairman, R. Elsasser (Germany), R. Hems
(USA), H. Kristensen (Sweden) and K.B. Norris (UK). The
Executive Committee expresses its sincere thanks to the CECC Members for four years of time-consuming voluntary work which was required to produce the fourth edition. The main responsibility for coordinating the drafting fell upon Messrs. SØrensen and
Norris and the Executive Committee would like to express a special commendation to them.
During their respective periods of office as President of FIDIC Messrs. Miller, Eldridge and Frick-Meijer provided consider-
able support to the drafting committee, The European International Contractors (EIC) on behalf of the Confederation of International
5
Contractors' Associations (CICA) and supported by Associated General Contractors of America (AGC) played a valuable consultative role and FIDIC particularly thanks Messrs. R. Aidred (UK) and G. Lodigiani (Italy) who were most active in this function and were supported by many others, notably Messrs. R. Bollinger (EIC), J. Cuisinier (France), J. de Greef (Netherlands) and Messrs. D.G. Armstrong and C. Molineaux (USA). Mr. Angus Cleaver of Bain Clarkson Ltd, London provided the knowledge and drafting skill for the insurance clauses and was a valuable adviser on risk allocation. Mr. Christopher Seppala of White & Case, Paris, on behalf of the International Bar Association gave valuable advice on the legal aspects and a check to ensure legal conformity of the entire document was carried out by Mr. David Wightman of Turner Kenneth Brown, London.
Finally, the Executive Committee wishes to express its thanks to former Managing Director, Mr. Burt Campbell, who assisted the drafting committee throughout the revision process and who has, since he retired, undertaken the coordination of the production of this Guide. FIDIC Secretariat receives requests from time to time to assist in the interpretation of individual contracts which are based upon
conditions of contract similar to those contained in the fourth edition. It should be evident that as a federation of Consulting Engineers FIDIC cannot consider itself competent to give legal advice and in any event the legal interpretation of a contract will, inter alia, depend upon the law governing the particular contract as well as the precise wording of the contract. One objective of this Guide is to indicate what the drafting committee intended in
drafting the various clauses. The interpretation of individual clauses in a specific contract will be determined by the Courts or by arbitration.
The final section of this Guide contains a photo reproduction of FIDIC's "Conditions of Contract for Works of Civil Engineering Construction, Fourth Edition 1987 (Reprinted 1988 with editorial amendments)", better known as "Red Book 4". Within the text of this Guide, the clauses from Red Book 4 are copied and are shown in italics. The italicized clauses should be identical to the corresponding clauses in the final section. If any discrepency is found between corresponding clauses, the reader should refer to the photo reproduced final section to determine the correct wording.
CONTENTS FOREWORD CONTENTS INTRODUCTION TENDERING PROCEDURE
5 7
17 22
Conditions of Contract Specification Drawings Bill of Quantities The Tender Instructions to Tenderers
22 22
1. General
24 25 25 25 26 27 27 28 28
2. Documents 3. Completion and Submission of Tenders 4. Supplementary Information Required 5. Amendments to Tender Documents 6. Currency Requirements and Exchange Rates 7. Site Visits 8. Tender Bond
9. Bonus
23 23 23
24
10. Local Legislation 11. Examination of Tenders 12. Acceptance of Tender Evaluation of Tenders Award of Contract Contract Agreement Procedural Flowchart
28
THE PARTIES TO THE CONTRACT
35
The Employer The Contractor
35 36
THE ENGINEER
38
COMMENTARY ON THE CONDITIONS
40
28 29
29 29 30 31
General Comment
DEFINITIONS AND INTERPRETATION
40
Clause 1 1.1
1.2 1.3 1.4 1.5
Definitions Headings and Marginal Notes Interpretation Singular and Plural Notices, Consents, Approvals, Certificates and Determinations
40 44 44 44 44
ENGINEER AND ENGINEER'S REPRESENTATIVE Clause 2 © FIDIC 1989
45 7
2.1
2.2 2.3
2.4 2.5 2.6
Engineer's Duties and Authority Engineer's Representative Engineer's Authority to Delegate Appointment of Assistants Instructions in Writing Engineer to Act Impartially
ASSIGNMENT AND SUBCONTRACTING 3.1 4.1
4.2
Clause 3 Assignment of Contract Clause 4 Subcontracting Assignment of Subcontractor's Obligations
45
46 46 47
47 48 49
49 49 50
CONTRACT DOCUMENTS Clause 5 5.1
5.2 6.1
6.2 6.3 6.4 6.5 7.1
7.2 7.3
8.1
82 9.1
10.1 10.2
10.3 11.1 12.1 12.2 13.1 8
Language/s and Law Priority of Contract Documents Clause 6 Custody and Supply of Drawings and Documents One Copy of Drawings to be Kept on Site Disruption of Progress Delays and Cost of Delay of Drawings Failure by Contractor to Submit Drawings Clause 7 Supplementary Drawings and Instructions Permanent Works Designed by Contractor Responsibility Unaffected by Approval
51 51
GENERAL OBLIGATIONS
56
Clause 8 Contractor's General Responsibilities Site Operations and Methods of Construction Clause 9 Contract Agreement Clause 10 Performance Security Period of Validity of Performance Security Claims under Performance Security Source of Performance Security Clause 11 Inspection of Site Access to Data Clause 12 Sufficiency of Tender Adverse Physical Obstructions or Conditions Clause 13 Work to be in Accordance with Contract ©FIDIC 1989
52 53 53 54 54 54 54 55
56 56 56 57 58 58 58
59 60 60 61
61
14.1
14.2 14.3 14.4 15.1
16.1
16.2
17.1 18.1 19.1
19.2
Clause 14 Programme to be Submitted Revised Programme Cash Flow Estimate to be Submitted Contractor not Relieved of Duties or Responsibilities Clause 15 Contractor's Superintendence Language Ability of Contractor's Representative Interpreter to be made Available Clause 16 Contractor's Employees Engineer at Liberty to Object Language Ability of Superintending Staff Employment of Local Personnel Clause 17 Setting-Out Clause 18 Boreholes and Exploratory Excavation Clause 19 Safety, Security and Protection of the Environment Employer's Responsibilities
62 63 64 64 64 65 65 65
66 66 66 66
67 67 68
ALLOCATION OF RESPONSIBILITY AND INSUR69 ANCE OBLIGATIONS 20.1
20.2
203 20.4 21.1
21.2 21.3 21.4 22.1
22.2 22.3 23.1
23.2 23.3 24.1
24.2
Clause 20 Care of Works Responsibility to Rectify Loss or Damage Loss or Damage Due to Employer's Risks Employer's Risks Clause 21 Insurance of Works and Contractor's Equipment Scope of Cover Responsibility for Amounts not Recovered Exclusions Clause 22 Damage to Persons and Property Exceptions Indemnity by Employer Clause 23 Third Party Insurance (including Employer's Property) Minimum Amount of Insurance Cross Liabilities Clause 24 Accident or Injury to Workmen Insurance Against Accident to Workmen © FIDIC
1989
69
69 70 70 71
72 73
74 75
75 75 75 76 76
25.1 25.2
25.3 25.4
Clause 25 Evidence and Terms of Insurances Adequacy of Insurances Remedy on Contractor's Failure to Insure Compliance with Policy Conditions
76 77 77 77
INSURANCES ARRANGED BY EMPLOYER
78
Clause 21 Insurance of Works Insurance of Contractor's Equipment Scope of Cover Responsibility for Amounts not Recovered Clause 23 Third Party Insurance (including Employer's Property) Clause 25 Evidence and Terms of Insurance Adequacy of Insurances Remedy on Employer's Failure to Insure Compliance with Policy Conditions
78 78
78 79 79 79
79 79
79
OTHER OBLIGATIONS OF THE CONTRACTOR 80 Clause 26
26.1
Compliance with Statutes, Regulations
80
Clause 27
27.1
Fossils
80
28.1
Clause 28 Patent Rights
81
Royalties
81
282
Clause 29
29.1
Interference with Traffic and Adjoining Properties
82
Clause 30
30.1 30.2
Avoidance of Damage to Roads Transport of Contractor's Equipment or
82 82
30.3 30.4
Temporary Works Transport of Materials or Plant Waterbome Traffic
83
83
Clause 3] 31.1
31.2
Opportunities for Other Contractors Facilities for Other Contractors
84 84
Clause 32
32.1
Contractor to Keep Site Clear
85
Clause 33
33.1
Clearance of Site on Completion
85
LABOUR
86
Clause 34
34.1
Engagement of Staff and Labour
Rates of Wages and Conditions of Labour 10
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86 86
35.1
36.1
36.2 36.3 36.4 36.5 37.1
37.2 37.3 37.4 37,5
Employment of Persons in the Service of Others Repatriation of Labour Housing for Labour Accident Prevention Officer; Accidents Health and Safety Measures against Insect and Pest Nuisance Epidemics Burial of the Dead Supply of Foodstuffs Supply of Water Alcoholic Liquor or Drugs Arms and Ammunition Festivals and Religious Customs Disorderly Conduct Clause 35 Returns of Labour and Contractor's Equipment Records of Safety and Health Reporting of Accidents
86
MATERIALS, PLANT AND WORKMANSHIP
90
Clause 36 Quality of Materials, Plant and Workmanship Cost of Samples Cost of Tests Cost of Tests not Provided for Engineer's Determination where Tests not Provided for Clause 37 Inspection of Operations Inspection and Testing Dates for Inspection and Testing Rejection Independent Inspection
87 87 87 87 87 88 88 88 88 88 88
89 89 89 89 89
90 90 90 91 91
91
92 92 92 93
Clause 38
38.2
Examination of Work before Covering up Uncovering and Making Openings
93 94
39.1 39.2
Clause 39 Removal of Improper Work, Materials or Plant Default of Contractor in Compliance
94 95
SUSPENSION
96
38.1
Clause 40
40.1
40.2 40.3
Engineer's Determination following Suspension Suspension lasting more than 84 days
96 96 97
COMMENCEMENT AND DELAYS
98
Suspension of Work
Clause 41 © FIDIC 1989
11
41.1
Commencement of Works
98
Clause 42
42.1 42.2 42.3 43.1 44.1
44.2 44.3 45.1
46.1 47.1 47.2 48.1
48.2 48.3 48.4
49.1
49.2 49.3 49.4
50.1
Possession of Site and Access Thereto
98
Failure to Give Possession Wayleaves and Facilities
99 99
Clause 43 Time for Completion Clause 44 Extension of Time for Completion Contractor to Provide Notification and Detailed Particulars Interim Determination of Extension Clause 45 Restriction on Working Hours Clause 46 Rate of Progress Clause 47 Liquidated Damages for Delay Reduction of Liquidated Damages Bonus for Completion Clause 48 Taking-Over Certificate Taking Over of Sections or Parts Substantial Completion of Parts Surfaces Requiring Reinstatement Prevention from Testing
102
DEFECTS LIABILITY
108
Clause 49 Defects Liability Period Completion of Outstanding Work and Remedying Defects Cost of Remedying Defects Contractor's Failure to Carry Out Instructions Extension of Defects Liability No Remedying of Defects in Dredging Work after Completion Clause 50 Contractor to Search
100 100 101
102
103 104 104 105
106 106 107 107
108 108
109 109 110 110
ALTERATIONS, ADDITIONS AND OMISSIONS Clause 51
51.1 51.2
Variations Instructions for Variations
112 113
Clause 52
52.1 52.2 12
Valuation of Variations Power of Engineer to Fix Rates ©FIDIC 1989
114 115
52.3 52.4
Variations Exceeding 15 per cent Daywork
116 117
PROCEDURE FOR CLAIMS
119
53.1 53.2 53.3 53.4 53.5
Clause 53 Notice of Claims Contemporary Records Substantiation of Claims Failure to Comply Payment of Claims
119 119 120 120 121
CONTRACTOR'S EQUIPMENT, TEMPORARY WORKS AND MATERIALS 54.1
54.2 54.3 54.4 54.5 54.6 54.7 54.8
Clause 54 Contractor's Equipment, Temporary Works and Materials; Exclusive Use for the Works Vesting Revesting and Removal Employer not Liable for Damage Customs Clearance Re-export of Contractor's Equipment Conditions of Hire of Contractor's Equipment Costs for the Purpose of Clause 63 Incorporation of Clause in Subcontracts Approval of Materials not Implied Suitability of Contractor's Equipment Preference for Local Products Contractor's Arrangements for Services Hazards on Site Maintenance of Roads, etc.
MEASUREMENT 55.1 56.1 57.1 57.2
58.1 58.2 58.3
Clause 55 Quantities Clause 56 Works to be Measured Clause 57 Method of Measurement Breakdown of Lump Sum Items
122
122 122 123 123 123 123 124 124 125 125 125 125 125 125 125
126
126 126 127
127
PROVISIONAL SUMS
128
Clause 58 Definition of 'Provisional Sum' Use of Provisional Sums Production of Vouchers
128 129 129
© FIDIC 1989
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NOMINATED SUBCONTRACTORS 59.1 59.2
59.3 59.4 59.5
Clause 59 Definition of 'Nominated Subcontractors' Nominated Subcontractors; Objection to Nomination Design Requirements to be Expressly Stated Payments to Nominated Subcontractors Certificates of Payment to Nominated Subcontractors
CERTIFICATES OF PAYMENT 60.1
Clause 60 Monthly Statements Monthly Payments Payment of Retention Money Correction of Certificates Statement at Completion Final Statement Discharge Final Certificate Cessation of Employer's Liability
60.2 60.3 60.4 60.5 60.6 60.7 60.8 60.9 60.10 Time for Payment
61.1 62.1
62.2
Currency of Account and Rates of Exchange Payments to Contractor Payments to Employer Currency of Account and Payments Place of Payment Advance Payment Clause 61 Approval only by Defects Liability Certificate Clause 62 Defects Liability Certificate Unfulfilled Obligations
REMEDIES 63.1
63.2 63.3 63.4 64.1
65.1 65.2 14
Clause 63 Default of Contractor Valuation at Date of Termination Payment after Termination Assignment of Benefit of Agreement Clause 64 Urgent Remedial Work
130
130 130 131
132 133
134
134 135 136 137 137 137 138 138 139 139 140 140 141 141 141 142 142
143 144 144
144 145 146 146 147
SPECIAL RISKS
147
Clause 65 No Liability for Special Risks Special Risks
148 148
© FIDIC 1989
65.3
Damage to Works by Special Risks
65.4 65.5 65.6 65.7
Projectile, Missile Increased Costs arising from Special Risks Outbreak of War Removal of Contractor's Equipment on Termination Payment if Contract Terminated
65.8
66.1
67.1
67.2 67.3 67.4
68.1
68.2 68.3
69.3 69.4 69.5
70.1
70.2
71.1 72.1
72.2 72.3
150
RELEASE FROM PERFORMANCE
152
Clause 66 Payment in Event of Release from Performance
152
SETTLEMENT OF DISPUTES
153
Clause 67 Engineer's Decision Amicable Settlement Arbitration Failure to Comply with Engineer's Decision
153 155 155
NOTICES
157
Clause 68 Notice to Contractor Notice to Employer and Engineer Change of Address
DEFAULT OF EMPLOYER 69.1 69.2
149 149 149 150 150
Clause 69 Default of Employer Removal of Contractor's Equipment Payment on Termination Contractor's Entitlement to Suspend Work Resumption of Work
156
157
157 157 158
158 159 159
160 160
CHANGES IN COST AND LEGISLATION
161
Clause 70 Increase or Decrease of Cost Subsequent Legislation
161 161
CURRENCY AND RATES OF EXCHANGE
169
Clause 71 Currency Restrictions Clause 72 Rates of Exchange Currency Proportions Currencies of Payment for Provisional Sums
169 169
170 171
POSSIBLE SUPPLEMENTARY CLAUSES
172
Bribes
172
© FIDIC 1989
15
Confidentiality Restrictions on Expenditure Contractor as Joint Venture Special Provision for Duties and Taxes
172 173 173 173
APPENDIX
CONDITIONS OF CONTRACT FOR WORKS OF CIVIL ENGINEERING CONSTRUCTION
Fourth Edition Part I GENERAL CONDITIONS WITH FORMS OF TENDER AND AGREEMENT Part II CONDITIONS OF PARTICULAR APPLICATION WITH GUIDELINES FOR PREPARATION OF PART II CLAUSES
© FIDIC 1989
174
INTRODUCTION Standardisation both in technical and administrative matters is essential for the satisfactory completion of projects of civil engineering construction. Construction projects today usually contain elements of plant and machinery to form part of the completed project and this makes the contract conditions more complex than in the past when plant was usually installed under separate contracts after completion of the construction contract. In addition, the total finance for a major project is now customarily drawn from several sources and the likelihood that the Owner will be able to obtain additional funding to meet substantial cost over-runs has become exceedingly remote, if not impossible. In order to complete a project within the required time and budget it is essential that each phase of its preparation and execution, starting with the assessment of feasibility and terminating with the handing over of the completed project by the Contractor to the
Owner, be formulated with precision in order to limit delays, disputes and unforeseen additional costs.
The object of this publication is to comment on the Clauses contained in the fourth edition of the Conditions of Contract for Works of Civil Engineering Construction published by the Inter-
national Federation of (independent) Consulting Engineers
(FIDIC). The extent of the comments on the Sub-Clauses differs considerably, as some Clauses are more complex than others, and the length of a commentary should not be taken to reflect the relative importance of the subject matter.
By way of introduction some notes are included relating to the tendering procedure recommended by FIDIC. More commentary
on this tendering procedure can be found in the FIDIC publication entitled Tendering Procedure (Procedure for obtaining and evaluating tenders for civil engineering contracts) available from FIDIC Secretariat.
There are obvious advantages to using detailed contract provisions based upon a standard form of contract which holds a reasonable balance between the requirements and interests of the parties concerned and in particular allocates fairly the risks and responsibilities between the contracting parties. In the majority of cases the contracting parties will react favourably to clearly stated obligations and this will do much to avoid unsatisfactory performance, increased costs and disputes which can arise if the trust that
needs to exist between the parties to a construction contract is lacking.
The use of standard conditions of contract will not only facilitate the successful completion of a contract but will, in all probability, result in lower tender prices, as tenderers will be familiar with the conditions that will apply under the contract. This implies that
they will not need to make financial provision for contract
conditions with which they are not familiar and whose consequences they may have difficulty in assessing. The widespread use of standard conditions of contract also provides a stable basis
for training and educating personnel responsible for contract management and avoids their having to work with ever changing contract conditions. ©FIDIC 1989
17
The FIDIC Conditions of Contract for Works of Civil Engineering Construction were first published in 1957. Up to that time there were no conditions which had been specifically prepared to
govern international contracts. The first edition of the FIDIC Conditions (the Red Book as it quickly became known because the title was long and the cover was red) was published at a time when international contracting was in its boom period and the need for a standard set of conditions became apparent. The first
edition was based on a form of contract in use in the United Kingdom which was published by the Institution of Civil Engineers (ICE) and thus very much reflected traditions and a legal system that were specifically British. A second edition was issued in the mid-sixties but this did not change the conditions contained in the first edition, it merely added a Part III to the first edition. This Part III was drafted to provide particular changes to the General Conditions when the document was to be used for dredging and land reclamation contracts.
A third edition which did involve a complete revision was published in 1977 and was accompanied by an explanatory document entitled 'Notes on Documents for Civil Engineering Con-
tracts'. FIDIC maintains a committee, the Civil Engineering Contracts Committee (CECC), which monitors the use of the Red Book and is responsible for reporting to the FIDIC Executive Committee. In 1983 the CECC advised the Executive Committee that in some quarters the document was being criticised by Employers (Owners) for being too Anglo-Saxon in its concept and language, presumably the result of a far wider use than it had previously en-
joyed. Certain amendments were identified which were being applied almost consistently by Employers and it was considered advisable to bring the Conditions into line with current practice. Another factor was that in many cases where the Conditions were being used for projects in developing countries, the representatives of the Employer did not have the breadth of authority to delegate duties to the Engineer which it had been envisaged that they would have when the third edition was prepared and it was felt desirable to reconcile the Conditions with current circumstances. Accordingly, the Executive Committee requested the CECC to prepare a fourth edition and the following is a brief summary of the terms of reference — Change only where change is necessary. — Maintain the basic role of the Engineer. — Pay close attention to some specific topics such as Bonds and Guarantees, Apportionment of Risk, Insurance, Claims Procedures, Certificates and Payments and Dispute Procedures. — Endeavour to update the language so that it is more understandable to those charged with administering the Conditions on site. There were some procedural differences in the drafting process as compared with the third edition. In the preparation of the third edition, representatives of the Contractors' Associations had participated almost as co-drafters and it had been indicated on the 18
©FIDIC 1989
cover of the Conditions that the document was approved by the various contractors' groupings throughout the world. For the fourth
edition it was agreed that the contractors' representatives would have consultative status during the drafting process but the final document would be the sole responsibility of FIDIC. European International Contractors (EIC) were mandated by the Confederation of International Contractors' Associations (CICA) to represent CICA in this consultative role and the ETC representatives were assisted by two representatives of the Associated General Contractors of America (AGC). In addition, during the course of the revision there was considerably more consultation with the World Bank than had been the case
in previous revisions. Also, FIDIC was able to benefit from meetings with representatives of the Joint Arab Funds, who have substantial experience in monitoring the use of the third edition. FIDIC greatly appreciated the opportunity for consultation with both of these bodies, but this consultation does not imply that either organisation approves the fourth edition in its entirety. The CECC members also availed themselves of the opportunity to consult experts in the fields where they themselves did not claim any particular expertise other than practical experience. In particular this applied to insurance and law. This book deals with each specific clause and gives a commentary upon the clause by those responsible for the drafting but it will
probably be helpful at this point to summarise the principal changes from the third edition. EDITORIAL Part II (Conditions of Particular Application) has been greatly expanded by going from an aide memoire to a fairly comprehensive set of fully developed example clauses. — Part II has been printed as a separate volume. This enables Part I (General Conditions) to be attached to the tender documents in their printed form. This provides satisfactory evidence that no changes have been made therein and that whatever changes are required will be effected by an entry in Part II. — The previous Part III (Dredging and Reclamation Works) has been incorporated into Part II. — The listing of the various Contractors' Associations no longer
appears but this does not affect the use of the Conditions by members of CICA Member Associations. — The style of the language and the layout of the clauses has been modernised to some degree but the sequence numbering of the clauses has been preserved. GENERAL PRINCIPLES — The role of the Engineer has been maintained. — The role of the Employer has been made more visible. Where increases in cost or extensions of time are to be determined by the Engineer, he has an obligation to consult with both the Employer and the Contractor before making his determination. 1(WQ
19
— Every endeavour has been made to maintain the overall balance — —
— —
of rights and obligations between the two parties to the contract. Current practice has been reflected in the new edition. Procedures have been set out in greater detail and in an actionorientated way. The Conditions cater for a larger degree of Plant. Greater recognition has been made of the fact that some design of Permanent Works is, on occasion, made the responsibility of the Contractor.
HARMONISATION Where possible, efforts have been made to harmonise with the
Conditions of Contract for Electrical and Mechanical Works (the Yellow Book). However, having regard to the differing nature of the works some notable differences remain. This would not prevent the two sets of conditions being used by different contractors on the same site.
GENERAL The material in this Guide does not form part of the Conditions nor is it intended to be incorporated in the Conditions other than by the use of example clauses. Further, it does not purport to give an authoritative legal interpretation of the Conditions, but it is envisaged that it will be helpful in the understanding of the intent of the Conditions and in drafting particular Part II Conditions. For the successful achievement of a project the first essential is to have Drawings and Specifications, based upon competent designs,
together with a Bill of Quantities to enable the probable cost of the Works to be established. These documents, together with the Conditions of Contract, form the legal document which, under the applicable law, defines the rights and obligations of the two parties, the Employer and the Contractor, in their relationship for the realisation of the project. However, the legal document also establishes the working relation-
ship within which an employer can expect to receive from an efficient contractor a soundly executed project to time and cost. Equally, a contractor can expect reasonable working conditions,
fair and balanced application of the Contract and to be paid promptly what he is entitled to receive. To achieve optimum results it is essential that when tenders are invited, tenderers are not expected to cover in the rates they quote for risks which they could not reasonably foresee or evaluate at the time of preparation of their tenders.
It is in the Employer's interest for him to assume responsibility under the Contract for costs arising from events which may never occur, which lie outside the Contractor's control or which cannot be covered by insurance at a reasonable premium. Such events are classified in the fourth edition as Employer's Risks. 20
©FIDIC 1989
Against this background competent and experienced contractors are able to submit competitive tenders, without the need to include
large contingency sums to cover unpredictable hazards. The Employer will only meet the cost of such hazards if they actually occur. Close cooperation and teamwork between Employer, Contractor and Engineer, within the framework of the Contract, with a mutual desire to produce a satisfactory end product by well organised, safe and efficient methods, will reduce to a minimum the risk of delays or misunderstandings. When mistrust or lack of confidence occurs troubles may arise and a contract may run into difficulties. No wording in the Contract can prevent this from happening if one or both of the parties or the Engineer fails to perform his duty under the Contract responsibly and correctly.
The FIDIC Conditions of Contract have been written for use where the services of an independent Engineer are used for supervision of construction. The Conditions provide under Sub-Clause 2.6 that where the Engineer is required to exercise his discretion
he shall act impartially. If the Engineer is an employee of the Employer, such impartiality is still required.
© FIDIC 1989
21
TENDERING PROCEDURE The FIDIC Conditions of Contract envisage that a contractor will
be selected by the Employer following competitive tendering. FIDIC has published a document entitled 'Tendering Procedure' which presents a systematic approach to the selection of tenderers and the obtaining and evaluating of tenders. It is intended to assist the Employer/Engineer to receive sound competitive tenders with a minimum of qualifications and formulated so that they can be quickly and efficiently assessed. At the same time, every effort has been made to provide the opportunity and incentive for contractors to respond easily to invitations to tender for projects they are well qualified to implement. Experience has shown that, for major projects and those involving international tendering, prequalification of tenderers is desirable since it enables the Employer/Engineer to establish, in advance, the competence of firms subsequently invited to tender. It also ensures that invitations are addressed to leading companies who would not necessarily participate in open or unrestricted tendering. Such unrestricted tendering does not always facilitate appropriate competition because the number of tenderers may be so great as to make the odds against tendering successfully unacceptable. Additionally, prequalification has the advantage of reducing the inflationary effect which must arise where firms incur unproductive expense in submitting a large number of tenders in the knowledge that a high proportion of these must be unsuccessful. A flowchart illustrating the recommended procedures for the prequalification of tenderers, for obtaining tenders and for opening and evaluation of tenders is reproduced on subsequent pages. The documents issued to tenderers (the Tender documents) normally comprise Conditions of Contract, Specification, Drawings, Bill of Quantities and form of Tender, together with Instructions
to Tenderers. All except Instructions to Tenderers become
Contract documents on award of Contract. It is usual to send the
Tender documents to tenderers under cover of a letter which should be limited to identifying the documents and giving the recipient an invitation to tender.
Conditions of Contract The Conditions of Contract will consist of Part I and Part II of the
Red Book. The Conditions set out the legal/contractual arrange-
ments that will apply to the Contract. The principles and the method to be followed in their preparation are described in a later chapter of this Guide.
Specification The Specification will define the scope and the technical require-
ments of the Contract. The quality of materials and the standards of workmanship to be provided by the Contractor must be clearly described, together with the extent, if any, to which the Contractor will be responsible for the design of the permanent works. Details must be included of samples to be provided and tests to be carried
out by the Contractor during the course of the Contract. Any limitations on the Contractor's freedom of choice in the order, timing or methods of executing the work or sections of the works
22
© FIDIC 1989
must be clearly set out and any restrictions in his use of the site of the works, such as the provision of access or space for other contractors, must be given.
Drawings The Drawings must be in sufficient detail to enable tenderers to
assess accurately, in conjunction with the Specification and the Bill of Quantities, the nature and scope of work included in the Con-
tract. Only rarely is it possible to provide, at tender stage, a complete set of drawings so fully detailed that the work can be executed without any further drawings becoming necessary. On most contracts supplementary drawings will be issued after award as work proceeds. Bill of Quantities The Bill of Quantities is a list of items giving descriptions and
estimated quantities of work to be executed under the Contract. The Red Book assumes a remeasurement form of contract, although that does not preclude the inclusion of a number of lump sum items in the Bill of Quantities provided that the scope of work to be covered by each lump sum item is adequately defined.
The Tender It is highly desirable when inviting competitive offers from a number of tenderers, that the tenders received should be based as far as possible on equal terms and conditions and presented in a standardised manner. In this way evaluation and comparison between the tenders received can be made more simply and accurately with less risk of misunderstandings, errors and omissions. The Tender is the most important single document submitted by the tenderer. It is here that each tenderer confirms that he has read and understood the requirements of the Tender documents and based on such requirements it is here that he states his tender sum for undertaking and fulfilling all his obligations under the Contract. It is therefore essential for the Employer that all Tenders received are stated in identical terms and thus it is necessary for the Employer, when inviting Tenders, to provide tenderers with a standard form of tender which each tenderer is required to complete and sign. The form of Tender which is included at the end of the first volume of the Red Book following Part I of the Conditions of Contract is recommended for this purpose. It is short, it is clear and when signed and submitted creates a legally binding and valid offer. It is common for Tenders to be identified by a tender reference or contract number which should be added to link the Tender to the project in question. The organisation to which the Tender is being submitted must be stated in the appropriate space on the form.
The sum to be entered under paragraph 1 of the Tender is the tenderer's total Tender sum, which should be the same as the total © FIDIC 1989
23
from the summary page of the Bill of Quantities. The amount shall be entered in words and in figures and in the event of a discrepancy between the two it is common practice in most countries that
the written amount shall prevail over the amount expressed in figures.
The sum agreed may vary during the execution of the project depending on what circumstances occur, e.g. the instruction of variations, the occurrence of unforeseen events, which in accordance with the Conditions of Contract entitle the Contractor to additional (or reduced) payment. Under paragraph 4 the Employer must state the time during which he requires the Tender to remain valid and open to acceptance.
This time should be adequate to permit proper evaluation and award procedures to be completed.
In the event that the stated time proves to be insufficient, the Employer may ask tenderers to extend the period of validity of their Tenders for a further named period. At the same time tenderers should be asked to extend the validity of any tender bond accordingly. Tenderers are free to extend or not, if so requested, and in the event that they choose not to do so, the Employer has no right to cash or hold their tender bond. The Employer must also fill in, before the issue of the Tender documents, the necessary details in the list given in the Appendix to Tender, in accordance with the Notes at the foot of the Appendix. No reference is given to a covering letter in the form of Tender given in the Red Book. The completed Tender is, in many cases, sufficient in itself. If tenderers are invited or required to submit supplementary information, they should do so under a separate covering letter and in such a case it may be necessary for tenderers to add a reference to this letter in the Tender before submission.
Instructions to Tenderers Instructions to tenderers must be prepared to meet the requirements
of individual contracts. Their purpose is to convey information and instructions which apply during the tendering period. Any material on which it is intended to rely after award must be included elsewhere, e.g. in the Conditions of Contract or the Specification.
The following notes provide a guide to subjects to be covered, but they are not necessarily exhaustive.
1. General Under this heading should be included brief details of the organisation (Government, Ministry, Department, Authority, etc.) calling for Tenders, together with an outline of the project to be covered by the Contract. 24
© FIDIC 1989
Any stipulations regarding firms and persons qualified to tender, such as prior prequalification and/or requirements in the event of formation of joint ventures, should be stated, together with details of any special requirements to establish the validity of the Tender and the authority of the signatory, e.g. Power of Attorney. Tenderers must be advised if the successful tenderer will be required to establish a locally registered company for the purpose of the Contract.
2. Documents A list of documents issued to tenderers should be included together with instructions as to which of these documents must be completed by the tenderer and handed in on the submission date. If the Tender documents are not issued free of charge then the
sum required for the original set and for any additional sets should be stated and whether payment is to be made in local or equivalent foreign currency. Tenderers should be advised as to how the extra sets of documents can be obtained and also of procedures to be followed for the return of the documents by unsuccessful tenderers.
3. Completion and Submission of Tenders Concise instructions as to the time, date and place for the submission of Tenders should be given. It should also be made clear to tenderers that all entries and signatures should be in indelible ink and that no erasures or additions are permitted other than those necessary to correct errors. All such corrections must be initialled. It is normal to ask for more than one copy of the Tender, in which case tenderers should be instructed as to the manner in which the Tenders are to be packaged. It is usual to stipulate that one set of documents should be clearly marked 'Original Tender' and others marked 'Copy', and that if there are discrepancies the Original Tender takes precedence. Photocopies of the Original Tender minimise the risk of discrepancies. The tenderer should be told whether, if he has handed in his Tender before the formal submission date or has sent it by post, he has the right to withdraw, modify or correct it after dispatch. This would normally be permitted, provided that a request for
modification, etc., has been received by the Employer either in writing or by cable, telex or facsimile transmission before the time set for receiving Tenders. The Original Tender as amended would then be considered as the official offer.
4. Supplementary Information Required. Tenderers should be advised of any supplementary informa-
tion to be submitted with the Tender documents, such as details of the proposed sureties for any performance security, ©FIDIC 1989
25
general terms of insurance (see Sub-Clause 25.1 of the Conditions of Contract) the constitution of the tenderer's organisation together with the address to be used for the purposes of the Contract, a preliminary programme of work (the Instruc-
tions to Tenderers should give an indication of what is required) and a list of major items of Contractor's Equipment required for the purpose of executing the works. A forecast of labour and staff, local and foreign, may be re-
quested. Where a Tender sum has been requested on the basis that it is adjustable by reason of changes in the cost of labour, materials and transport, the tenderer should, unless the particulars are given by the Employer in the Tender documents, be requested to indicate the formula or formulae which he wishes to use as the basis for adjusting the sum. If his formula is to be index based, officially published indices should be used.
These would normally be indices published in the country where the project is to be located. The tenderer should also provide the names of any subcontractors he proposes to employ, together with details of those parts of the works proposed to be subcontracted. It must also be made clear in the Instructions to Tenderers to what extent the supplementary information is required by the Employer purely to demonstrate that the tenderer has understood the extent and nature of the work and the programme required and to what extent, if at all, the supplementary information is required as a part of the offer for inclusion in the Contract documents on award.
5. Amendments to Tender Documents It is possible that explanations, revisions, additions or deletions to the documents issued to tenderers may be necessary during the tendering period. Tenderers should be told how these will be dealt with, the normal method being by formal addenda. If a tenderer is in doubt about the meaning of some item in the Tender documents, he should be advised to notify the Engineer not later than a given number of days (e.g. 42 days) before the Tender submission date. The Engineer will then issue to all tenderers an explanation in the form of an addendum. Each addendum should be accompanied by a receipt form which must be returned so that the Employer and the Engineer have confirmation that each tenderer has received all the necessary information. Failure to acknowledge receipt of an addendum may result in rejection of a Tender. The addenda become part of the Tender documents and the numbers issued should be inserted by tenderers in the space provided in paragraph 1 of the form of Tender. Tenderers would normally be required to submit their offers
strictly in accordance with the requirements of the Tender documents. If tenderers are permitted to offer an alternative Tender, any departure from the documents issued to tenderers should be clearly identified and detailed. The option to submit alternative Tenders may make the evaluation process difficult.
26
© FIDIC 1989
6. Currency Requirements and Exchange Rates Tenderers should be required to give notice to the Employer
of the various currencies in which they may wish to be paid if the Contract is awarded to them. This information should be supplied as soon as possible after invitations to tender have been issued and not less than a given number of days (e.g. 42 days) before the Tender submission date. The Employer may wish to specify in the Instructions to Tenderers that payments will be made only in the currencies of the countries from which the goods and services are to be acquired. The Tender documents should include a schedule in which tenderers record the sums in the various approved currencies that together constitute their total Tender sum. This schedule becomes part of the Contract when awarded.
It is common practice to require tenderers to submit their Tenders in a single currency - usually of the country in which the Works are to be executed. If this is the case it is necessary
to define the rates of exchange which have been used to convert the various currencies, in which payment is required, into a single currency unit. As more than one tenderer may request part payment in one particular currency, it is preferable that the exchange rates to be used should be consistent and, therefore, that they should be defined by the Employer and notified by him, or the Engineer on his behalf, to each tenderer a reasonable time before the date of submission. In accordance with Sub-Clause 72.2 of the Conditions of Contract, these rates shall be stated in Part II or, if not so stated, shall be those prevailing, as determined by the Central Bank of the country in which the works are to be executed, on the
date 28 days prior to the latest date for the submission of Tenders or as provided for in the Tender. The rates quoted are incorporated in the Contract when awarded. In order to assist in forward budgeting it is useful to request tenderers to provide an estimate of the payments to be made
by the Employer to the Contractor during the period of the Contract, preferably in quarterly periods. The estimate of payments referred to above does not become a part of the Contract and should not be regarded as binding. The figures may have to be reviewed and adjusted as the work proceeds. Expenditure under Provisional Sums will affect the
figures, and so also will changes in the source of supply of materials and modifications to the programme or variations of the Works.
7. Site Visits
It is customary to expect tenderers to visit the site of the project during the tender period. Details should be given of the date and arrangements for visiting when staff of the Employer and © FIDIC 1989
27
the Engineer will be on site to answer questions and when any exploratory work carried out will be available for inspection,
e.g. borehole cores laid out and exploratory adits lit. A summary of all questions and answers thereto should be issued to all tenderers. Tenderers should not be restricted in their site visits and details of who to contact for further visits should be given.
8. Tender Bond
If a tender bond is required, a pro forma version of such bond should be included in the Tender documents. The amount of the bond should be stated and the currency or currencies required. In all cases the surety or sureties must be satisfactory to the Employer. If a tender bond has been requested, any Tender that has not been so secured will be rejected unless otherwise indicated. Tenderers should be advised that the bond will be released after a specified period, or earlier if one of the Tenders has, within the period, been accepted by the Employer and an acceptable performance security has been submitted by the successful ten-
derer. It should also be made clear what will happen to the tender bond if the tenderer who has been accepted fails to provide a performance security within a specified number of days after being requested to do so. Usually the tender bond will be forfeited.
9. Bonus
If a bonus in relation to early completion is to be included in the Contract, tenderers should be reminded to state in the space provided in the Appendix to Tender what proportions of local and foreign currencies they wish to receive if they earn it.
10. Local Legislation If there are any local laws or decrees or any special arrangements which the Employer wishes the tenderers to note particularly, these should be listed in the Instructions to Tenderers. It should be made clear that the list is not comprehensive. 11. Examination of Tenders Tenderers should be advised that the Employer, or the Engi-
neer on behalf of the Employer, may ask any tenderer for clarification of his Tender, but that no tenderer will be permitted to alter his Tender sum after Tenders have been opened. Clarifications that do not change the Tender sum may, if they are acceptable, be incorporated in the Contract. It should be made clear that all Tenders must remain valid for a specified validity period and any extension thereto agreed to by the respective tenderer.
28
©FIDIC 1989
Tenderers should be advised if any factors other than the Tender sum, such as foreign currency proportions, are to be taken into account when evaluating Tenders. 12. Acceptance of Tender The Employer will normally state that he does not bind himself to award the Contract to the tenderer submitting the lowest tender or to any tenderer.
Evaluation of Tenders Tenders for major and international contracts are generally opened
in public when the names of the tenderers are announced together
with the Tender sum. No other details are given at that time. Thereafter the Tenders are checked and studied by the Engineer on behalf of the Employer. One of the first tasks of the Engineer is to establish whether the Tenders are arithmetically correct and, if they are not, how to overcome any errors. Another task is to check that the Tenders are responsive, that all the required information has been provided and that everything is consistent with the terms of the Tender documents.
If errors, omissions or inconsistencies are apparent a meeting should be held with the lowest tenderer, and possibly with one or two other tenderers, to clarify the position and to agree how to deal
with the points in the event of an award. At such meetings, tenderers should not be permitted to change the substance of their Tenders. If it does not prove possible to clarify and agree how differences are to be resolved, the particular Tender should be treated as unresponsive and no further consideration should be given to that Tender.
Award of Contract When the Engineer has completed the evaluation of tenders, and
has obtained any necessary clarifications, he will make a recommendation to the Employer on the award of the Contract. If the Employer agrees with the Engineer's recommendation and is in a position to award the Contract immediately he will issue a Letter of Acceptance to the successful tenderer. On occasions certain steps may still be necessary before the Employer can award the Contract, e.g. Government approval or ratification of a loan agreement. In such a case, the Employer may decide to issue to the potential Contractor a letter of intent. Such a letter should state the conditions that must be met before the award can be made. In most cases letters of intent are worded in such a way as to create no commitment on the part of the Employer and the potential Contractor carries out any preliminary work or incurs costs at his own risk. Sometimes a letter of intent
gives instructions to the potential Contractor to take some action, such as to order materials and Plant or to carry out limited
work. In this case, it is necessary for the letter of intent to be ©FIDIC 1989
29
clear about how, and to what extent, the potential Contractor will
be paid for what he does if, for any reason, the Contract is not ultimately entered into. In most cases it is the Employer's Letter of Acceptance which, together with the tenderer's Tender, will form a binding Contract between the two parties, valid from the date of issue of the Letter. If on account of errors, omissions or inconsistencies in the Tender, or for any other reason, any changes have been tentatively
agreed at a meeting of clarification, the Employer's letter may
constitute only a counter-offer and the Contract will only be binding on the date that the Contractor acknowledges and confirms, in writing, agreement to the terms of the Letter of Acceptance.
Contract Agreement The Conditions of Contract, Sub-Clause 9.1, make provision for
the execution of a Contract Agreement between the parties which will record all the terms of the Contract between them. However, the execution of this document is not normally necessary to create a legally binding contract. Nevertheless, in some countries a Contract Agreement is a requirement of law to create a binding Contract irrespective of the existence of a Tender and a Letter of Acceptance. In such cases, in particular, the Contract Agreement must be carefully prepared to comply with the requirements of the relevant law. An example form of Contract Agreement is included at the end of the first volume of the Red Book following Part I of the Conditions of Contract and may be used in the event that the Employer
wishes to execute a formal agreement. In such event it is
important to ensure that the exact wording of the Contract Agree-
ment, including the documents listed as forming part thereof, properly records what has been agreed. The parties must ensure that the signatories and method of signature are in accordance with all the applicable laws.
Note: The FIDIC publication 'Tendering Procedure' mentioned at the beginning of this chapter, gives fuller details of all
stages of tendering and should be studied by all those involved in such process.
30
©FIDIC 1989
PROCEDURAL FLOWCHARTS Recommended procedure for the prequalification of tenderers SEC1]ON
——
1.0 INVITATION TO CONTRACTORS TO PR EQUAL IFY
EMPLOYER/ENGINEER PLACE PREQUALIFICATION ADVERTISEMENT IN PRESS, EMBASSIES ETC. AS APPROPR lATE STATING:
• EMPLOYER & ENGINEER • OUTLINE OF PROJECT
— ..- — CONTRACTORS —
/ '——F
(SCOPE, LOCATION, PROGRAMME)
• ENQUIRY ISSUE & TENDER SUBMISSION DATES
• INSTRUCTIONS FOR APPLYING FOR PREOUALIFICATION • SUBMISSION DATE FOR CONTRACTORS' PREQUALIFICATION DATA.
2.0 ISSUE & SUBMISSION
OF PREQUALIFICATION DOCUMENTS
——+— ISSUE PREQUALIFICATION INSTRUCTIONS & QUESTIONNAIRES REQUESTING FROM EACH COMPANY/JOINT VENTURE: • ORGAN ISATION AND STRUCTURE. • EXPERIENCE IN THE INTENDED TYPE OF WORK AND THE COUNTRY. • RESOURCES: MANAGERIAL TECHNICAL LABOUR
REQUEST PREQUALIFICATION DOCUMENTS
RESPOND TO QUESTIONNAIRES ON COMPANIES AND, IF APPROPRIATE, JOINT VENTURES
PLANT • FINANCIAL STATEMENTS
I
I
ACKNOWLEDGE RECEIPT
-r— 3.0 ANALYSIS OF PREQUALIFICATION DATA AND SELECTION & NOTIFICATION OF LIST OF SELECTED TENDERERS
ANALYSE PREOUALIFICATION DATA: • COMPANY/JOINT VENTURE STRUCTURE.
• EXPERIENCE • RESOURCES • FINANCIAL STABILITY • GENERAL SUITABILITY
w SELECT COMPANIES/ JOINT VENTURES FOR INCLUSION IN LIST OF TENDER ERS
I
FOR SHORT" ______________________ LIST ONLY J ACKNOWLEDGE RECEIPT
i 1
CONFIRM INTENTION TO SUBMIT VALID TENDER
I I
NOTIFY ALL CONTRACTORS/ JOINT VENTURES OF THE LIST OF SELECTED TEN DER ERS.
——f LIST OF TENOERERS
©FIDIC 1989
31
Recommended procedure for obtaining tenders SECTION
— — — —— EMPLOYER/ENG'JEER —
4.0 ENQUIRY DOCUMENTS
LIST OF TENDERERS
——
TENDERERS
PREPARE ENQUIRY DOCUMENTS
• LETFER OF INVITATION TO TENDER
• INSTRUCTIONS TO TEN DER B AS
• CONDITIONS OF CONTRACT
• SPECIFICATION • DRAWINGS • BILL OF QUANTITIES • INFORMATION DATA
• FOAMOFTENDER& APPENDICES
5.0 ISSUE OF
ENQUIRY DOCUMENTS
ACKNOWLEDGE RECEIPT
COMMENCE PREPARATION OF TENDERS
6.0 VISITS TO SITE BY TENDERERS
APPLY FOR VISIT TO SITE IF REQUIRED
7.0 AMENDMENTS TO ENQUIRY DOCUMENTS
ACKNOWLEDGE RECEIPT
32
©FIDIC 1989
Recommended procedure for obtaining tenders (continued) SECTION
——
TENDERERS
.EMPLOYER/ENGINEER'V
'V
RAISE QUERIES OF ANY) BY METHOD a) orb) BELOW:
8.0 TENDERERS' QUERIES Correspondence
Method
a) BY CORRESPONDENCE: SUBMIT QUERIES IN
PREPARE REPLIES
WA I TING
$ ISSUE QUERIES & REPLIES TO ALL TENDERERS IN WRITING
ACKNOWLEDGE RECEIPT
OR
OR b) BYTENOERERS
Tenderers' Conference Method
CONFERENCE: SUBMIT PREPARE REPLIES
ALL QUERIES IN WRITING BY GIVEN DATE
TENDERERS CONFERENCE
FIRST PHASE: INFORM TENDERERS PRESENT OF QUERIES & REPLIES. SECOND PHASE: TENDERERS SUBMIT ANY SUPPLEMENTARY QUERIES IN WRITING. THIROPHASE: REPLIESTOSUPPLEMENTARY QUERIES GIVEN ORALLY.
ISSUE TEXTOF QUERIES.
j
SUPPLEMENTARY QUERIES & _________________ REPLIES TO ALL TENDERERS
9.0 SUBMISSION AND RECEIPT OF TENDERS
r ADVISE TENDERERS —
I
ACKNOWLEDGE RECEIPT
(OPTIONAL)
WHOSE TENDERS HAVE NOT BEEN RECEIVED THREE
L DAYSBEFORE CLOSING DATE
RECORD DATE & TIME OF RECEIPT
SUBMIT TENDERS
ACKNOWLEDGE RECEIPT
OR RETURN UNOPENED ANY TENDERS RECEIVED LATE
ACKNOWLEDGE RECEIPT RETURN ENQUIRY DOCUMENTS
T KEEP DATE — VALID TENDERS SECURE UNTIL OPENING TIME
——
1
TENDER OPENING
©FIDIC 1989
33
Recommended procedure for the opening and evaluation of tenders —
SECTKN
—
— yr
10.0 OPENING OF, TENDERS
EMPLOYER/ENGINEER w
——
TENDERERS
—
___________________________ TENDER OPENING
ATTEND PUBLIC/ RESTRICTED OPENING IF DESIRED.
MAY BE PUBLIC, RESTRICTED OR PRIVATE.
• ANNOUNCE AND RECORD THE NAMES OF TENDERERS AND PRICES, INCLUDING PRICES FOR ALTERNATIVE TENDERS IF APPROPRIATE.
• ANNOUNCE AND RECORD NAMES OF TENDERERS (IF ANY) DISQUALIFIED DUE TO LATE OR NON-ARRIVAL OF TENDERS.
—--—*r—————— 11.0 EVALUATION OF TENDERS
EVALUATE TENDER
• TECHNICAL • CONTRACTUAL • COMMERCIAL
_)II.J
RAISE POINTS REQUIRING
CLARIFICATION, IF ANY. COMPLETE EVALUATION
PROVIDE CLARIFICATION
I
MEETINGS WITH SELECTED TENDERERS INDIVIDUALLY. AS NECESSARY TO DISCUSS ANY QUALIFICATIONS OR DTHE ASPECTS NOT CONFORMING TO THE
tONONcONcT AWARD OF CONTRACT (IF APPROPRIATE)
V PREPARE CONTRACT DOCUMENTS
SIGNATURE OF CONTRACT
ADVISE UNSUCCESSFUL TENDERERS. RETURN TENDER BONDS (IF PROVIDED)
34
©FIDIC 1989
SIGNATURE OF CONTRACT (SUCCESSFUL TENDERER)
UNSUCCESSFUL TENDE PEAS ACKNOWLEDGE, RETURN
ENQUIRY DOCUMENTS IF SO INSTRUCTED
THE PARTIES TO THE CONTRACT The FIDIC Conditions of Contract are based on the assumption
that the Employer, the first party, who has decided to have certain
works carried out for the implementation of a project, and is
sponsoring the Works, has decided to select a suitably qualified Contractor, the second party, to execute the Works. It is also assumed that the selection of the Contractor will have been made through competitive tendering based on tender documents prepared for the project by a Consulting Engineer. This process has been dealt with in the preceding section. The FIDIC Conditions of Contract cannot apply without an Engi-
neer being appointed by the Employer to administer the
Contract. Usually this would be the Consulting Engineer who has designed the project and prepared the tender documents. The Engineer is not a party to the Contract, but he plays an important role in the development process of the Works. The duties that the Engineer has to perform are defined under the Contract
and he must have the necessary delegated authority from the Employer if he is to be able to perform them. The delegation of this authority is usually to be found in the Agreement between the Employer and the Consulting Engineer. FIDIC will soon publish an updated model form of such an agreement: Client/Consultant Model Services Contract (The "White Book" — formerly called IGRA). The Agreement will stipulate as the primary duty of the Engineer that he carefully observes the requirements of the Employer in the
realisation of the project. It is important to note, however,
that the Conditions of Contract between the Employer and the Contractor stipulate that where, under the Contract, any of the Engi-
neer's duties are discretionary, the Engineer shall act fairly between the Employer and the Contractor and apply the Contract in an unbiased manner. The Conditions are based upon this fundamental principle and this requirement applies even if the Engineer is a member of the Employer's staff. The Contractor will, of course, have to assess whether or not he has confidence in the ability of an in-house Engineer to take independent decisions.
The Employer As stated in the section dealing with the tendering process, the Employer notifies the successful tenderer that he has been awarded the Contract by issuing a Letter of Acceptance which records any changes to the the Tender documents as submitted by the Contractor, resulting from agreement between the Employer and the Contractor, and the Contract Price. The Employer consents to, or declines, requests by the Contractor
to assign any portion of the Works, prepares the Contract Agreement (if any) for execution by both parties, approves the Performance Security and the insurers as well as the terms of the insurance policies submitted by the Contractor. The Employer will wish to ensure that the contract works insurance is in accordance with the laws and regulations of the country in which the Works are to be executed and that the policy adequately covers the Employer's Risks and the deductible limits are acceptable. ©FIDIC 1989
35
Provided it is acceptable to the Employer the Contractor will normally use his customary sources for the provision of securities and insurance.
The Employer makes the advance payment (if any) against a suitable guarantee from the Contractor and authorises the Contractor to move on to the Site. During the period of the Contract the Employer makes payments to the Contractor as certified by the Engineer to be due under the Contract. The Employer takes over Sections of the Works as they reach substantial completion, if this is required under the Contract, and ultimately takes over the whole of the Works following the issue of Certificates by the Engineer. In the event of the Contractor becoming liable for liquidated damages, the Employer may deduct an amount in accordance with the Conditions of Contract. The Employer may authorise work to be completed by others if
the Contractor is in default. The Employer can terminate the Contract in the event of the Contractor failing to perform or in certain other circumstances defined in, and subject to, the law governing to the Contract. The Employer, if he defaults, can also be subject to cancellation of the Contract by the Contractor or to suspension of work by the Contractor. The Employer and the Engineer should maintain such contact with each other as will facilitate smooth and unhindered progress of the
Works. The Employer should respond, without delay, on all matters for which the Engineer is required by the Contract to consult the Employer before issuing an instruction, determining an amount to be added to or deducted from the Contract Price or granting an extension of time.
The Contractor The obligation of the Contractor is to execute and complete the
Works, for which he has submitted his Tender, within the time specified in the Contract. In addition he has an obligation to remedy any defects which appear during the Defects Liability Period. As soon as is reasonably possible after receiving notification from
the Engineer, the Contractor shall submit the securities, guarantees and insurance policies required by the Contract and shall commence the Works. He prepares the construction programme, provides all necessary materials, Contractor's Equipment, Temporary Works, management, superintendence and labour and selects
the method of carrying out the Works. The Contractor is not responsible for the design and specification of the Permanent
Works unless expressly provided for in the Contract nor for any Temporary Works not designed by him. The Contractor receives and complies with instructions from the Engineer acting on behalf of the Employer and is responsible for the care of the Works throughout the construction period until the Works are officially taken over by the Employer or are deemed to be taken over by the Employer. 36
©FIDIC 1989
The Contractor is responsible for his own staff and work force and for taking out social and other insurances in respect of his personnel. He must comply with all applicable laws, by-laws and regulations and ensure that all those for whom he is responsible also comply. Under normal circumstances the Contractor designs all Temporary Works and submits his proposals, with supporting calculations, to the Engineer for comment. If, during the construction period, he encounters unforeseen physical obstructions or conditions on the Site he notifies the Engineer who issues relevant instructions. The Engineer will review the circumstances and after
consultation with both parties will determine to what extent, if any, the Contractor may be reimbursed for additional costs or granted an extension of the Time for Completion.
In the event of default by the Employer the Contractor may suspend progress of the Works or reduce the rate of work and claim an appropriate extension of time and/or additional payment. Normally there will be one main or principal contractor who signs the Contract and has overall responsibility for the execution and
completion of the project. There will usually be a number of Subcontractors working on the Site undertaking specialist contracting activities. The Subcontractors are responsible to the Contractor for material, workmanship, performance and progress and the Contractor is responsible under the Contract for each Subcontractor's work and behaviour. On occasions the Employer will wish to have a particular Subcon-
tractor engaged because of his knowledge of that Subcontractor's skills or because of his knowledge of some process, materials or plant particularly required by the Employer. A Sub-
contractor selected in this way is known as a nominated Subcontractor. Once he has been accepted by the main Contrac-
tor the latter is responsible for the work of the nominated
Subcontractor to the same extent as applies to the work of all other Subcontractors. For this reason it is important that nomination is
not misused by the Employer. Failure to perform satisfactorily by a nominated Subcontractor can cause many difficulties on Site. The particular conditions applying to the appointment of nominated Subcontractors are dealt with in Clause 59 of the Conditions. The Contractor may object to the nomination for good and sufficient reasons (e.g. lack of experience or financial strength) and
engagement against the wishes of the Contractor will probably
disturb harmony on the Site. There would have to be very exceptional reasons for such a thing to happen.
In very large or complex projects a number of contractors may form a joint venture to act as the Contractor. In such cases the same principles apply as in the situation with only one Contractor.
In the case of a joint venture the Employer would normally require that all the parties to the joint venture have joint and several liability. In projects where several contractors are operating on a single site
under individual contracts, each contractor must give the other contractors reasonable cooperation and opportunities for carrying out their work and this should be reflected in the terms of the contracts and in the respective programmes. ©FIDIC 1989
37
THE ENGINEER The Engineer is not a party to the Contract between the Employer
and the Contractor but his terms of engagement are set out in an agreement between the Employer (Client) and the Engineer (Consultant). This agreement is often in the form recommended by FIDIC which is entitled International General Rules of Agree-
ment Between Client and Consultant (IGRA). An updated
version of this model form of agreement is scheduled for publication in early 1990. The new IGRA will stipulate what authority is delegated to the Engineer by the Employer and should specifically state if any of the authority given to the Engineer under the FIDIC Conditions is subject to restriction. The duties under the FIDIC Conditions which are allocated to the Engineer include the issue of information and instructions to the
Contractor as the work proceeds, commenting on the Contractor's proposals for carrying out the work, ensuring that materials and workmanship are as specified, agreeing measurements of
work done and checking and issuing to the Employer interim and final payment certificates. In administration of the Contract all communications with the Contractor pass through the Engineer, thus avoiding possible confusion and misunderstanding although meetings between the Employer, the Contractor and
the Engineer should be held regularly. The Engineer's duties will normally include instructions relating to management of the Contract and changes in the nature and extent of the work, the cost thereof and the time for completion. For example, the issue of
instructions to proceed with or to suspend the progress of the Works is a matter of management. In order to maintain confidence
between the parties it is important that the Contract properly discloses the procedures for the Engineer's action in such matters and that the Engineer duly observes such procedures. Many of the functions allocated to the Engineer involve financial
matters. The certificates he issues for interim and final
payments include all cost elements arising under the terms of the
Contract other than those (if any) resulting from arbitration
proceedings and the application of the liquidated damages clause. Under normal circumstances the payments certified by the Engineer will lie within the Contract Price and will, therefore, have already been authorised by the Employer, but variations ordered
under Clause 51, fluctuations in the price of labour, materials and freight under Clause 70, works done or materials and services supplied under Clause 58 and the settlement of the Contractor's request for additional payment under such Clauses as 12 and 53 could each result in an adjustment to the Contract Price.
The FIDIC Conditions are based upon the principle that the Engineer has the authority to determine additional payments. This
is in the interests of efficient management and avoidance of duplication of effort. It also ensures that the Tender Price from efficient contractors will be lower than would be the case if the Contractor did not feel sure that when he was required to do
additional work his remuneration for such work would be evaluated by a professional able to judge the value of such work.
In the event the Employer wishes to limit the authority of the
Engineer this should be clearly stated in Part II so that the
Contractor is aware in advance of tendering the conditions under
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which he is required to work. The degree to which the Employer leaves the Engineer to determine matters affecting the extent and cost of the Works and the time for their completion will depend to a large extent on the in-house capability of the Employer. Therefore, the Engineer should be selected having regard to his professional integrity and his ability to fulfil his obligations under the
Contract and to administer the Contract fairly and impartially in the interests of both parties. In the exercise of his duties the Engineer accepts the responsibilities attached to them. These responsibilities should be clearly defined in the Agreement between the Employer and the Engineer and should be made known to the Contractor.
As the Works progress the Engineer will be required by the Contract to give instructions, give or refuse approval or consent, approve work, authorise payments, issue certificates, etc. It should be understood by both parties to the Contract that in giving approval or consent and such other acts which are the duty
of the Engineer his objective is to ensure that the Employer receives the Works at completion in accordance with the requirements of the Contract and that the Contractor is suitably rewarded for the work he carries out.
The Engineer's duty is to interpret the Contract as written. In doing so he should endeavour to determine what the Contractor could have reasonably foreseen would have been required of him when preparing his tender. It is important to realise, however, that neither the Employer nor the Contractor is finally bound by the Engineer's interpretation or determination even if it is given in the fonn of a decision under Clause 67. This Clause defines the steps to be taken where the Engineer's decision thereunder is not acceptable to one or both parties. For further information see the commentary on Clause 67.
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39
COMMENTARY ON THE CONDITIONS GENERAL COMMENT The notes that follow comment upon some aspects of individual clauses of the fourth
edition of Conditions of Contract for Works of Civil Engineering Construction. All clauses and example sub-clauses are reproduced but the commentaries should not be taken as representing any definitive interpretation of the text of these clauses. In any given contract such interpretation will depend, among other things, on the law governing the contract in question. The notes are, however, intended to give users a practical guide to the operation of various clauses and to explain their relationship to each other. The GENERAL CONDITIONS contained in Part I should always be included in the tender documents in their printed form as issued by FIDIC as in this way contractors know exactly what is contained in them. Any additions, deletions or variations to Part I should be effected solely by an appropriate entry in Part II, to reduce the risk of ambiguities. When Employers require the General Conditions to be attached to tenders they should not accept photo-copies as such copies may contain provisions which differ from those contained in the printed version. DEFINITIONS AND INTERPRETATIONS Clause 1 consists of definitions of keywords used throughout the Contract documents.
It should be remembered when reading the text that in general any word which begins with a capital letter represents a defined term which has the meaning given in Clause 1 and no other meaning. The only exceptions are the definitions under (g) 'cost', 'day', 'foreign currency, and 'writing' which begin with letters in the lower case. Where definitions are self-explanatory no comment is given.
Definitions
1.1
In the Contract (as hereinafter defined) the following words and expressions shall have the meanings hereby assigned to them, except where the context otherwise requires: (a) (i) "Employer" means the person named as such in Part II of these Conditions and the legal successors
in title to such person, but not (except with the consent of the Contractor) any assignee of such person. (ii) "Contractor" means the person whose tender has been accepted by the Employer and the legal successors in title to such person, but not (except with the consent of the Employer) any assignee of such person. (iii) "Subcontractor" means any person named in the Contract as a Subcontractor for a part of the Works or any person to whom a part of the Works
has been subcontracted with the consent of the Engineer and the legal successors in title to such person, but not any assignee of any such person. (iv) "Engineer" means the person appointed by the Employer to act as Engineer for the purposes of the
Contract and named as such in Part II of these Conditions.
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It should be noted that this definition identifies the Engineer as the person named as such in Part II of the Conditions the effect of which is to prevent the Employer from changing the Engineer without the consent of the Contractor. The reason for this change from the third edition is that the identity of the Engineer (and his reputation) has been a factor in the calculation of the Contractor's Tender.
(v) "Engineer's Representative" means a person ap-
pointed from time to time by the Engineer under Sub-Clause 2.2.
(b) (i) "Contract" means these Conditions (Parts I and
II), the Specification, the Drawings, the Bill of Quantities, the Tender, the Letter of Acceptance, the Contract Agreement (if completed) and such further documents as may be expressly incorporated in the
Letter of Acceptance or Contract Agreement (if completed).
(ii) "Specification" means the specification of the Works included in the Contract and any modification thereof or addition thereto made under Clause 51 or submitted by the Contractor and approved by the Engineer. (iii) "Drawings" means all drawings, calculations and technical information of a like nature provided by the Engineer to the Contractor under the Contract and all drawings, calculations, samples, patterns, models, operation and maintenance manuals and other technical information of a like nature submitted by the Contractor and approved by the Engineer. (iv) "Bill of Quantities" means the priced and completed bill of quantities forming part of the Tender. (v) "Tender" means the Contractor's priced offer to the Employer for the execution and completion of the Works and the remedying of any defects therein in accordance with the provisions of the Contract, as accepted by the Letter of Acceptance. (vi) "Letter of Acceptance" means the formal acceptance by the Employer of the Tender.
The Letter of Acceptance, together with the Contractor's written acknowledgement (if adjustments have been made to the Tender), have the effect of constituting a contract between the Employer and the Contractor. The Letter of Acceptance should include, either in the text or as appendices thereto, a statement to this effect, a complete list of the documents which comprise the Tender as accepted, together with confirmation of the adjustments (if any) which have been made to the Tender originally submitted, by agreement between the Employer and the Contractor, in correcting arithmetical errors and modifying or eliminating reservations. The Letter of Acceptance will ordinarily record the Contract Price, and will refer to the delivery of a performance security and the execution of a formal Contract Agreement should these be required.
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The Letter of Acceptance is sometimes preceded by a letter of intent in which the Employer expresses his intention to accept a tender, subject to defined conditions. The letter of intent is not ordinarily binding upon the Employer unless it is stated therein that the Employer will make payment for specified work undertaken prior to the issue
of the Letter of Acceptance. If the Contractor is required to undertake some work prior to the issue of the Letter of Acceptance it is sometimes advantageous to both the Employer and the Contractor that a separate contract should be entered into in respect of such work rather than that an attempt should be made to incorporate such work into the Contract at a later stage. Should the potential Employer decide, after the issue of the letter of intent that he will not, after all, proceed with the Works the Contractor might well have difficulty in obtaining reimbursement for any work which he has already done unless there is a specific undertaking by the Employer to pay him.
(vii) "Contract Agreement" means the contract agreement (if any) referred to in Sub-Clause 9.1. (viii) "Appendix to Tender" means the appendix comprised in the form of Tender annexed to these Conditions.
(c) (i) "Commencement Date" means the date upon which the Contractor receives the notice to commence issued by the Engineer pursuant to Clause
4].
The Commencement Date and the Time for Completion have been related directly to the receipt by the Contractor of the notice to commence. This notice should therefore be sent or delivered against a signature of receipt. The Appendix to Tender makes provision for stating the time interval after the issue of the Letter of Acceptance within which the Contractor is to receive the notice. ii) "Time for Completion" means the time for com-
pleting the execution of and passing the Tests on Completion of the Works or any Section or part thereof as stated in the Contract (or as extended under Clause 44) calculated from the Commencement Date.
(d) (i) "Tests on Completion" means the tests specified in the Contract or otherwise agreed by the Engineer
and the Contractor which are to be made by the
Contractor before the Works or any Section or part thereof are taken over by the Employer.
It is specifically stated that the Tests on Completion must be carried out before the expiry of the Time for Completion and adequate time should be allowed for the
carrying out of the tests. (ii) "Taking-Over Certificate" means a certificate issued pursuant to Clause 48.
(e) (i) "Contract Price" means the sum stated in the Letter of Acceptance as payable to the Contractor for the execution and completion of the Works and the remedying of any defects therein in accordance with the provisions of the Contract.
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The Contract Price is the sum stated for the provision of the whole of the Works but it is not necessarily the sum the Contractor will receive as throughout the Conditions there are provisions for additions or deductions e.g., for variations. (ii) "Retention Money" means the aggregate of all monies retained by the Employer pursuant to SubClause 60.2(a).
(f) (i) "Works" means the Permanent Works and the Temporary Works or either of them as appropriate. (ii) "Permanent Works" means the permanent works to be executed (including Plant) in accordance with the Contract. (iii) "Temporary Works" means all temporary works of every kind (other than Contractor's Equipment) required in or about the execution and completion
of the Works and the remedying of any defects therein.
(iv) "Plant" means machinery, apparatus and the like intended to form or forming part of the Permanent Works.
Plant, as such, is a new definition and is different from Constructional Plant which appeared in the third edition. Plant, in the fourth edition means plant which is to be incorporated in the Permanent Works. It should be noted that the definition of Plant in the civil works document is different in one respect from the definition of Plant in the third edition of the Yellow Book Conditions. In the Yellow Book Plant includes materials but in the Red Book it does not. (v) "Contractor's Equipment" means all appliances and things of whatsoever nature (other than Temporary Works) required for the execution and completion of the Works and the remedying of any defects therein, but does not include Plant, materials or other things intended to form or forming part of the Permanent Works. (vi) "Section" means a part of the Works specifically
identified in the Contract as a Section. Where the Works are to be divided into Sections there should be a clear identification in Part II or in the Specification in order to operate Clauses 43 and 46 and suitable provision should be included in the Appendix to Tender.
(vii) "Site" means the places provided by the Employer where the Works are to be executed and any other places as may be specifically designated in the Contract as forming part of the Site. It will probably be necessary to define the Site in detail in the Specification or by means of a drawing included in the Contract documents.
(g) (i) "cost" means all expenditure properly incurred or to be incurred, whether on or off the Site, including overhead and other charges properly allocable
thereto but does not include any allowance for profit. © FIDIC 1989
43
Attention is drawn to the fact that 'cost' includes overhead charges which in turn include financial costs but the defined term does not include profit. (ii)"day" means calendar day.
All periods of time have been expressed in multiples of seven days, a 'day' meaning a calendar day not a working day. (iii) "foreign currency" means a currency of a coun-
try other than that in which the Works are to be located.
(iv) "writing" means any hand-written, type-written,
or printed communication, including telex, cable and facsimile transmission. Two specific names must be entered in Part II under Clause I. These are: Definitions
1.1 .(a)(i)
The Employer is (insert name)
1.l.(a)(iv) The Engineer is (insert name) If other identifications are essential e.g., the name of an International Financing Institution (IFI) they should be added to the above entry.
Further definitions can be added in Part II should they be required. For example, in international contracts training of personnel has become a frequent requirement. In such cases a definition of 'Training' could be introduced with a requirement that details are stated in Part II or in the Specification.
Headings and Marginal Notes
1.2
Interpretation
1.3
The
headings and marginal notes in these Conditions
shall not be deemed part thereof or be taken into consideration in the interpretation or construction thereof or of the Contract. Words importing persons or parties shall include firms
and corporations and any organisation having legal capacity.
Singular and Plural
1.4
Words importing the singular only also include the plural and vice versa where the context requires.
Notices,
1.5
Wherever
Consents, Approvals, Certificates and Determinations
in the Contract provision is made for the
giving or issue of any notice, consent, approval, certificate or determination by any person, unless otherwise specified such notice, consent, approval, certificate or determination shall be in writing and the words "no-
tify", "certify" or "determine" shall be construed accordingly. Any such consent, approval, certificate or determination shall not unreasonably be withheld or delayed.
Two important requirements are contained in this Sub-Clause. The first is that all notices, etc., must be in writing. The second is that any consent, approval, certificate or determination must not be unreasonably withheld or delayed. 44
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ENGINEER AND ENGINEER'S REPRESENTATIVE
Engineer's 2.1 Duties and Authority
(a) The Engineer shall carry out the duties specified in the Contract. .
.
(b) The Engineer may exercise the authority specified in
or necessarily to be implied from the Contract, provided, however, that if the Engineer is required, under the terms of his appointment by the Employer, to obtain the specific approval of the Employer before exercising any such authority, particulars of such requirements shall be set out in Part II of these Conditions. Provided further that any requisite approval shall be deemed to have been given by the Employer for any such authority exercised by the Engineer. (c) Except as expressly stated in the Contract, the Engi-
neer shall have no authority to relieve the Contractor of any of his obligations under the Contract. Reference has been made earlier to the function, duties and responsibilities of the Engineer.
In a number of Clauses in the Conditions the Engineer is required to undertake due consultation with the Employer and the Contractor before making his determination. The extent of such consultation will be at the discretion of the Engineer.
The Conditions establish that, with certain specified exceptions, all instructions from the Engineer to the Contractor will be in writing. Where an instruction from the Engineer
to the Contractor is not confirmed in writing by the Engineer the Contractor has the right to confirm the instruction in writing to the Engineer, see Sub-Clause 2.5. Restrictions on the Engineer's authority may derive from the requirements of legislation or regulations, governmental or other. Usually such restrictions will apply to the approval of variations leading to increases in cost or extensions of time. Sub-Clause 2.1(b) requires that any specific restrictions on the Engineer's authority shall
be set out in Part II, but nevertheless, if the Contractor carries out work involving additional cost on the instructions of the Engineer, the Contractor will be entitled to payment for such work even if the Engineer had not the authority to order such work. The following is an example of a suitable clause to be added in Part II:
Engineer's Duties
2.1
The Engineer shall obtain the specific approval of the Employer before carrying out his duties in accordance
with the following Clauses of Part I:
(a) Clause (insert applicable number)
(b) Clause (insert applicable number) (c) Clause (insert applicable number) The list should be extended or reduced as necessary. In some cases the obligation to obtain approval of the Employer may apply only to one Sub-Clause out of several in a Clause or approval may only be necessary beyond certain limits, monetary or otherwise. Where this is so the wording must be varied accordingly. If the obligation to obtain the approval of the Employer could lead to the Engineer being unable to take action in an emergency, where matters of safety are involved, considera-
tion should be given to adding the following paragraph to the example clause given above: ©FIDIC 1989
45
Notwithstanding the obligation, as set out above, to ob-
tain approval, if, in the opinion of the Engineer, an emergency occurs affecting the safety of life or of the Works or of adjoining property, he may, without relieving the Contractor of any of his duties and responsibilities under the Contract, instruct the Contractor to execute all such work or to do all such things as may, in the opinion of the Engineer, be necessary to abate or reduce the risk. The Contractor shall forthwith comply, despite the absence of approval of the Employer, with any such instruction of the Engineer. The Engineer shall determine an addition to the Contract Price, in respect of such instruction, in accordance with Clause 52 and shall notify the Contractor accordingly, with a copy to the Employer.
Engineer's Representative
2.2
Engineer's Authonty to Delegate
2.3
The
Engineer's Representative shall be appointed by
and be responsible to the Engineer and shall carry out
such duties and exercise such authority as may be delegated to him by the Engineer under Sub-Clause 2.3.
The
Engineer may from time to time delegate to the
Engineer's Representative any of the duties and authorities vested in the Engineer and he may at any time
revoke such delegation. Any such delegation or revocation shall be in writing and shall not take effect until a copy thereof has been delivered to the Employer and the Contractor. Any communication given by the Engineer's Representative to the Contractor in accordance with such delegation shall have the same effect as though it had been given by the Engineer. Provided that:
(a) any failure of the Engineer's Representative to disapprove any work, materials or Plant shall not prejudice the authority of the Engineer to disapprove such work, materials or Plant and to give instructions for the rectification thereof; (b) f the Contractor questions any communication of the Engineer's Representative he may refer the matter to the Engineer who shall confirm, reverse or vary the contents of such communication. Sub-Clauses 2.2 and 2.3 deal with the appointment and duties of the Engineer's Representative, frequently referred to as the Resident Engineer. In the third edition certain specific duties were allocated to the Engineer's Representative. This has been changed in the fourth edition. The Engineer's Representative is appointed by the Engineer and the Engineer is responsible for his actions. However, the identity of the person appointed must be made known to the Employer and the Contractor before such appointment can become effective. Such duties and authority as the Engineer may wish to vest in the Engineer's Representative must be delegated in writing and care should be taken to ensure that the written delegation is specific. 46
© FIDIC 1989
The Engineer must determine what authority should be delegated in order to enable the work at the Site to proceed continuously and smoothly. The delegation must include
provision for the Engineer's Representative to take action in an emergency such as urgent remedial work which is referred to in Clause 64. The scope of delegation will vary depending on the size and nature of the project, its location in relation to the headquarters of the Employer and the Engineer and the capacity of the person appointed. For ease of reference clauses are listed below where the Engineer is mentioned:
4, 5, 6, 7, 12, 13, 14, 15, 16, 17, 18, 19, 20, 27, 30, 31, 33, 34(Part II), 35, 36, 37, 38, 39, 40, 41, 42, 44, 45, 46, 48, 49, 50, 51, 52, 53, 54, 56, 57, 58, 59, 60, 62, 63, 64, 65, 67, 68, 69, 70 and 73 onwards. Delegation should not normally be considered in respect of clauses 41, 44, 48, 62, 63, 65, 67 and 69.
In order not to cause unnecessary interruption of work at Site, delegation of authority
(in whole or in part) is common in respect of the following clauses: 4, 5, 7, 12, 14, 16, 17, 18, 19, 20, 27, 30, 31, 33, 34, 35, 36, 37, 38, 39, 40, 42, 45, 49, 50, 53, 54, 56, 59, 60 (except 60.6 and 60.8), 64 and 70.
Appointment of Assistants
2.4
The Engineer or the Engineer's Representative may appoint any number of persons to assist the Engineer's
Representative in the carrying out of his duties under Sub-Clause 2.2. He shall notify to the Contractor the names, duties and scope of authority of such persons. Such assistants shall have no authority to issue any instructions to the Contractor save in so far as such instructions may be necessary to enable them to carry out their duties and to secure their acceptance of materials, Plant or workmanship as being in accordance with the Contract, and any instructions given by any of them for those purposes shall be deemed to have been given by the Engineer's Representative.
Sub-Clause 2.4 authorises the appointment of Assistants by the Engineer, or the Engineer's Representative. Such Assistants have limited duties. On a major project there will be a number of Assistants on Site. A further example of where assistants are used is in circumstances where pre-fabricated construction elements or Plant are being manu-
factured in a Subcontractor's premises which are not situated in the country of the Engineer or the country in which the Site is situated.
Instructions
in Writing
25 Instructions given by the Engineer shall be in writing, provided that if for any reason the Engineer considers it necessary to give any such instruction orally, the Contractor shall comply with such instruction. Confirmation in writing of such oral instruction given by the Engineer,
whether before or after the carrying out of the instruction, shall be deemed to be an instruction within the meaning of this Sub-Clause. Provided further that f the Contractor, within 7 days, confirms in writing to the Engineer any oral instruction of the Engineer and such confirmation is not contradicted in writing within 7 days by the Engineer, it shall be deemed to be an instruction of the Engineer.
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The provisions of this Sub-Clause shall equally apply to instructions given by the Engineer's Representative and any assistants of the Engineer or the Engineer's Representative appointed pursuant to Sub-Clause 2.4.
Sub-Clause 2.5 contains the necessary obligation for the Engineer to give his instructions in writing or, if the Engineer considers it necessary that instructions are given orally,
that they are confirmed in writing as soon as possible thereafter. The importance of keeping records of all matters related to the work on Site cannot be over-emphasised and it will be seen in later clauses that the maintenance of adequate contemporary records may be fundamental to payment of claims for additional work. It should be noted also that where the Engineer does not give written confirmation of an instruction to the Contractor then the Contractor may himself confirm to the Engineer that he has received such an instruction. If the Engineer fails, in writing, to contradict such a notice within 7 days the instruction is deemed to have been given by the Engineer to the Contractor.
Engineer to Act 2.6 Impartially
Wherever, under the Contract, the Engineer is required
to exercise his discretion by:
(a) giving his decision, opinion or consent, or
(b) expressing his satisfaction or approval, or (c) determining value, or (d) otherwise taking action which may affect the rights and obligations of the Employer or the Contractor
he shall exercise such discretion impartially within the terms of the Contract and having regard to all the circumstances. Any such decision, opinion, consent, expression of satisfaction, or approval, determination of value or action may be opened up, reviewed or revised as provided in Clause 67.
Sub-Clause 2.6 is a new introduction. It stipulates in the Contract what was treated in previous conditions as a professional obligation of the Engineer. The Sub-Clause provides that whenever the Contract requires the Engineer to give decisions, opinions or consents, to express satisfaction or approval, to determine value or to take any other action requiring the Engineer to exercise his discretion, he shall do so in an impartial manner. Behaving impartially implies being prepared to listen to and consider the views of both the Employer and the Contractor and then to make a determination based upon the facts.
The Engineer's determinations can be challenged by either party in accordance with the procedure for dealing with disputes laid down in Clause 67. However, in order to avoid delay or interruption to the Works, the Engineer's determinations must be adhered to by both the Employer and Contractor until and unless they are varied by the Engineer himself, by amicable settlement or an arbitral tribunal, as provided for in Clause 67.
Although the Contractor may disagree with an instruction given by the Engineer the Contractor is obliged, under Sub-Clause 13.1 to carry out the instructions. He would be wise to record in writing his disagreement with the instruction and his reasons therefor.
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ASSIGNMENT AND SUBCONTRACTING
Assignment 3.1
of Contract
The Contractor shall not, without the prior consent of the Employer (which consent, notwithstanding the pro-
visions of Sub-Clause 1.5, shall be at the sole discretion
of the Employer), assign the Contract or any part
thereof, or any benefit or interest therein or thereunder, otherwise than by:
(a) a charge in favour of the Contractor's bankers of any monies due or to become due under the Contract,
or
(b) assignment to the Contractor's insurers (in cases where the insurers have discharged the Contractor's loss or liability) of the Contractor's rights to obtain relief against any other party liable. Usually the Contractor will have been selected by the Employer following pre-qualification, tendering and tender evaluation. The award of the Contract therefore implies confidence of the Employer in the Contractor. Obviously it is not envisaged by the Employer that the Contractor he has selected would assign the Contract to a third party. This would be inconsistent with the objectives of the whole selection procedure. The Conditions, for this reason, provide that the Contract may not be assigned in whole or in part without the express consent of the Employer. However, in recognition of the justified need of the Contractor for financing and insurance (particularly export credit insurance) this Clause makes express exceptions for such purposes.
Subcontracting
4.1
The Contractor shall not subcontract the whole of the Works. Except where otherwise provided by the Contract, the Contractor shall not subcontract any part of the Works without the prior consent of the Engineer. Any such consent shall not relieve the Contractor from any liability or obligation under the Contract and he shall be responsible for the acts, defaults and neglects of any Subcontractor, his agents, servants or workmen as fully as if they were the acts, defaults or neglects of the Contractor, his agents, servants or workmen.
Provided that the Contractor shall not be required to obtain such consent for: (a) the provision of labour, or
(b) the purchase of materials which are in accordance with the standards specified in the Contract, or
(c) the subcontracting of any part of the Works for which the Subcontractor is named in the Contract.
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Subcontracting of certain specialised parts of the work undertaken by the Contractor is not an unusual occurrence in the execution of a contract. This may at first sight appear to be in conflict with the comment on Sub-Clause 3.1 but this is not really the case. Although as stated in relation to Sub-Clause 3.1 the Employer wishes to have the Contract carried out by the Contractor he has selected, it is generally recognised that other persons or firms, by reason of their greater specialisation, experience or capacity, may be able to carry out specific works or services or furnish certain supplies, more efficiently than the Contractor. Accordingly, with the Employer's consent, which under the Conditions should not be unreasonably withheld, the Contractor may subcontract works, services or supplies to others. The responsibility of the Contractor to the Employer for the entire Contract remains and the Contractor retains responsibility for the work or services which he subcontracts. It is the duty of the Contractor to justify the need, for such specialisation. It is sometimes the practice that the Engineer, with the agreement of the Contractor, deals directly with the Subcontractor on technical matters. In such case it is essential that the Contractor is kept informed at all stages, particularly if matters of payment or programme are involved, so that the Contractor is immediately aware of discussions or correspondence that have taken place between the Engineer and the Subcontractor and can comment or take such other action as he may consider appropriate.
Normally the tenderer will state in his tender what work or services he proposes to subcontract and as far as possible the name of the subcontractors he proposes to use. There are occasions when the Employer will express the wish that certain tasks, operations or supplies of Plant or material be subcontracted to a particular specialist nominated by him.
Assignment of Subcontractors' Obligations
4.2
In the event of a Subcontractor having undertaken towards the Contractor in respect of the work executed, or the goods, materials, Plant or services supplied by such Subcontractor, any continuing obligation extending for a period exceeding that of the Defects Liability Period under the Contract, the Contractor shall at any time, after the expiration of such Period, assign to the Employer, at the Employer's request and cost, the benefit of such obligation for the unexpired duration thereof
Obviously, if at the expiry of the period during which the Contractor has a responsibility
to the Employer, that is at the end of the Defects Liability Period, there is still some unexpired guarantee or other obligation from a Subcontractor to the Contractor the latter must assign this right to the Employer. The Contractor must ensure that the Subcontractor will agree to such assignment.
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CONTRACT DOCUMENTS
Language/s 5.1
There is stated in Part II of these Conditions:
and Law
(a) the language or languages in which the Contract
documents shall be drawn up, and
(b) the country or state the law of which shall apply to the Contract and according to which the Contract shall be construed.
If the said documents are written in more than one language, the language according to which the Contract shall be construed and interpreted is also stated in Part
II of these Conditions, being therein designated the "Ruling Language". It is important to establish the ruling language of the Contract and also the law to which the Contract is subject. The FIDIC Conditions have been drafted in the English language and great care is taken to ensure that FIDIC translations of these standard conditions convey the same meaning. If Part II of the Conditions is prepared in one language and is then translated into another there is the possibility that ambiguities and discrepancies may occur. It is one of the Engineer's functions to deal with any ambiguities and discrepancies as may become apparent but in doing so he should carefully avoid dictating to the Contractor how the work involved is to be carried out. The method of carrying out the Works is the responsibility of the Contractor.
Sub-Clause 5.1 requires that the language/s and law should be stated in Part II. The following is an example of an appropriate Part II entry:
Language/s and Law
5.1
(a) The language is (insert as applicable) (b) The law is that in force in (insert name of country)
If necessary (a) should be varied to read:
(a) The languages are (insert as applicable) The Ruling Language is (insert as applicable)
Priority of Contract Documents
5.2
The several documents forming the Contract are to be taken as mutually explanatory of one another, but in case of ambiguities or discrepancies the same shall be
explained and adjusted by the Engineer who shall thereupon issue to the Contractor instructions thereon and in such event, unless otherwise provided in the Contract, the priority of the documents forming the Contract shall be as follows:
(1) The Contract Agreement (if completed); (2) The Letter of Acceptance;
(3) The Tender;
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(4) Part II of these Conditions;
(5) Part I of these Conditions; and (6) Any other document forming part of the Contract.
In the fourth edition the order of priority of the documents forming the Contract is specified in more detail than in previous editions. However, this order of precedence set
out in Part I is a proposal and other orders of preference might be preferred by the Employer. Either of the two example clauses which follow can be an appropriate entry for Part II of the Conditions:
Priority of Contract
5.2
Delete the documents listed 1-6 and substitute: (1) the Contract Agreement (if completed);
Documents
(2) the Letter of Acceptance;
(3) the Tender; (4) the Conditions of Contract Part II; (5) the Conditions of Contract Part I; (6) the Specification; (7) the Drawings; and (8) the priced Bill of Quantities or where it is decided that no order of precedence of documents should be included, this Sub-Clause may be varied as follows:
Priority of Contract
5.2
The several documents forming the Contract are to be
Documents
taken as mutually explanatory of one another, but in the case of ambiguities or discrepancies the priority shall be that accorded by law. If, in the opinion of the Engineer, such ambiguities or discrepancies make it necessary to issue any instruction to the Contractor in explanation or adjustment, the Engineer shall have authority to issue such instruction.
Custody and 6.1 Supply of Drawings and Documents
52
Delete the text of the Sub-Clause and substitute:
The Drawings shall remain in the sole custody of the Engineer, but two copies thereof shall be provided to the
Contractor free of charge. The Contractor shall make
at his own cost any further copies required by him. Unless it is strictly necessary for the purposes of the Contract, the Drawings, Specification and other documents provided by the Employer or the Engineer shall not, without the consent of the Engineer, be used or communicated to a third party by the Contractor. Upon issue of the Defects Liability Certificate, the Contractor shall return to the Engineer all Drawings, Specifications and other documents provided under the Contract.
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The Contractor shall supply to the Engineer four copies of all Drawings, Specification and other documents submitted by the Contractor and approved by the Engineer in accordance with Clause 7, together with a reproducible copy of any material which cannot be reproduced to an equal standard by photocopying. In addition the
Contractor shall supply such further copies of such Drawings, Specification and other documents as the Engineer may request in writing for the use of the Employer, who shall pay the cost thereof
This Sub-Clause concerns the issue to the Contractor of Drawings and instructions required to enable him to carry out the Works. The Contractor will normally have provided an outline programme with his tender followed by a more detailed programme in accordance with Clause 14. With this information available to him the Engineer can organise the issue of Drawings and other information to meet the Contractor's requirements.
On some occasions the Engineer may not himself have the responsibility for preparing such Drawings or information but will be the channel through which such Drawings or information are passed to the Contractor. It is customary for all Drawings and information to be supplied in reproducible form.
This Sub-Clause also envisages that some Drawings, Specification or other documents may be provided by the Contractor. For example, prefabricated elements to be manufactured according to proprietary methods of the Contractor or where it is provided in the Contract that design of a part of the Permanent Works is the responsibility of the Contractor.
One Copy of 6.2 Drawings to be Kept on Site
One copy of the Drawings, provided to or supplied by the Contractor as aforesaid, shall be kept by the Con-
tractor on the Site and the same shall at all reasonable times be available for inspection and use by the Engineer and by any other person authorised by the Engineer in writing.
It is obviously necessary to have a copy of the Drawings on Site and available during working hours to both the Contractor and the Engineer or the Engineer's Representative.
Disruption of
Progress
6.3
The Contractor shall give notice to the Engineer, with a copy to the Employer, whenever planning or execution
of the Works is likely to be delayed or disrupted unless any further drawing or instruction is issued by the
Engineer within a reasonable time. The notice shall include details of the drawing or instruction required and of why and by when it is required and of any delay or disruption likely to be suffered if it is late. If the progress of the Contractor's work is likely to be hampered because of late issue of Drawings or instructions by the Engineer it is important that the Engineer should be informed by the Contractor that late issue will have certain cost and time effects.
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Delays and 6.4
Cost of Delay of Drawings
If, by reason of any failure or inability of the Engineer
to issue, within a time reasonable in all the circum-
stances, any drawing or instruction for which notice has been given by the Contractor in accordance with SubClause 6.3, the Contractor suffers delay and/or incurs costs then the Engineer shall, after due consultation with the Employer and the Contractor, determine:
(a) any extension of time to which the Contractor is entitled under Clause 44, and (b) the amount of such costs, which shall be added to the Contract Price, and shall notify the Contractor accordingly, with a copy to the Employer. This Sub-Clause safeguards the Contractor if he is delayed or involved in extra costs as a result of late issue to him of Drawings or instructions in respect of which notice has been given by the Contractor to the Engineer in accordance with Sub-Clause 6.3.
Failure by Contractor to Submit Drawings
6.5
Iffailure or inability of the Engineer to issue any draw-
ings or instructions is caused in whole or in part by the failure of the Contractor to submit Drawings, Specification or other documents which he is required to submit under the Contract, the Engineer shall take such failure by the Contractor into account when making his determination pursuant to Sub-Clause 6.4.
If the Contractor contributes to the delay referred to in Sub-Clause 6.4 the degree to which he is responsible will be taken into account when additional cost or time is calculated.
Supplementary Drawings and Instructions
71
The Engineer shall have authority to issue to the Con-
tractor,from time to time, such supplementary Drawings and instructions as shall be necessary for the purpose of the proper and adequate execution and completion of the Works and the remedying of any defects therein. The
Contractor shall carry out and be bound by the same. This Sub-Clause authorises the Engineer to issue such additional Drawings and instructions as are necessary for the Contractor to execute the Works and remedy any defects
observed before the end of the Defects Liability Period. It should be noted that under this Sub-Clause the Contractor is required to carry out all such instructions issued by the Engineer.
Permanent Works Designed by Contractor
7.2
Where the Contract expressly provides that part of the Permanent Works shall be designed by the Contractor, he
shall submit to the Engineer, for approval:
(a) such drawings, specifications, calculations and other information as shall be necessary to satisfy the Engineer as to the suitability and adequacy of that design, and
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(b) operation and maintenance manuals together with drawings of the Permanent Works as completed, in sufficient detail to enable the Employer to operate, maintain, dismantle, reassemble and adjust the Permanent Works incorporating that design. The Works shall not be considered to be completed for the purposes of taking over in accordance with Clause 48 until such operation and maintenance manuals, together with drawings on completion, have been submitted to and approved by the Engineer.
This Sub-Clause lays down the procedure for submission by the Contractor to the Engineer of drawings, etc., for such design of Permanent Works as is specified in the Contract as the responsibility of the Contractor. The Sub-Clause refers to submission to the Engineer for approval. It should be noted that approval by the Engineer of such documents does not absolve the Contractor from responsibility for their contents. The approval given by the Engineer signifies that in general what is proposed appears to conform to the requirements of the Contract. It is important to note that under Sub-Clause 7.2(b) the Works are not to be considered
as completed until maintenance manuals and other documents specified in the Contract have been submitted to and approved by the Engineer. Delay by the Contractor in submitting maintenance manuals will delay the issue of the TakingOver Certificate. Where part of the Works is designed by the Contractor based upon proprietary informa-
tion it may be necessary for agreements concerning confidentiality, secrecy or the
licensing of such proprietary information or related rights to be concluded between the Contractor, the Employer and the Engineer.
Responsibility Unaffected by Approval
7.3
Approval by the Engineer, in accordance with SubClause 7.2, shall not relieve the Contractor of any of his responsibilities under the Contract.
This Sub-Clause emphasises the extent of the approval by the Engineer of Contractor's Drawings refened to in Sub-Clause 7.2.
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GENERAL OBLIGATIONS
Contractor's Genera!
8.1
Responsibilities
The Contractor shall, with due care and diligence, design (to the extent provided for by the Contract), execute and complete the Works and remedy any defects
therein in accordance with the provisions of the Contract. The Contractor shall provide all superintendence, labour, materials, Plant, Contractor's Equipment and all other things, whether of a temporary or permanent
nature, required in and for such design, execution, completion and remedying of any defects, so far as the
necessity for providing the same is specified in or is reasonably to be inferred from the Contract. This Sub-Clause states the Contractor's overall responsibility for the execution of the Works and for the remedying of any defects observed before the expiry of the Defects Liability Period.
Site Operations 8.2
and Methods of Construction
The Contractor shall take full responsibility for the adequacy, stability and safety of all Site operations and methods of construction. Provided that the Contractor
shall not be responsible (except as stated hereunder or as may be otherwise agreed) for the design or specification of Permanent Works, or for the design or specification of any Temporary Works not prepared by the Contractor. Where the Contract expressly provides that part of the Permanent Works shall be designed by the Contractor, he shall be fully responsible for that part of such Works, notwithstanding any approval by the Engineer.
The Contractor is responsible for the safety of all Site operations and methods of construction. Responsibility for design and specification of the Permanent Works generally rests with the Engineer, but there may be exceptions such as the detailed design of specialised items of Plant or prefabricated elements (as referred to in the comment on Sub-Clause 6.1) designed and manufactured by the Contractor or by a nominated Sub-contractor (refer to the definition in Sub-Clause 59.1). Temporary Works are normally designed and specified by the Contractor. Where this is the case the Engineer may, depending upon the nature or importance of the Temporary Works, require information about their design. Where parts of the Permanent Works are to be used during construction as Temporary Works the design may riot necessarily
be carried out by the Contractor. In these circumstances the Contractor shall not be responsible for this design. Where such exceptions occur, these should be defined either in Part II of the Conditions of Contract or in the Specification.
This Clause should be read in conjunction with Clauses 20-25 dealing with allocation of responsibilities and insurance.
Contract Agreement
9.1
The Contractor shall, if called upon so to do, enter into
and execute the Contract Agreement, to be prepared and
completed at the cost of the Employer, in the form annexed to these Conditions with such modification as may be necessary.
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©FIDIC 1989
Under the laws of many countries the offer (the Tender) submitted by the Contractor and its acceptance (Letter of Acceptance) by the Employer are sufficient to constitute a legal contract. However, in some countries and particularly in less developed countries, a Contract Agreement between the Employer and the Contractor is required. The form of the Agreement must be annexed to Part I of the Conditions when the Tender documents are issued. The legal aspects in connection with a Contract Agreement should be borne in mind (e.g. the need of counter-signature or ratification, liability in law, period of limitation for action in law).
In large international contracts, the Contractor will sometimes be a joint venture. In such event a Clause would ordinarily be added in Part II subsequent to Clause 72 (see example text 'Joint and Several Liability' on page 173).
Performance Security
10.1
If the Contract requires the Contractor to obtain secu-
rity for his proper performance of the Contract, he shall obtain and provide to the Employer such security within 28 days after the receipt of the Letter of Acceptance, in the sum stated in the Appendix to Tender. When providing such security to the Employer, the Contractor shall notify the Engineer of so doing. Such security shall be in the form annexed to these Conditions or in such other as may be agreed between the Employer and the Contractor. The institution providing such security shall be
subject to the approval of the Employer. The cost of
complying with the requirements of this Clause shall be borne by the Contractor, unless the Contract otherwise provides.
In addition to Retention Money and the requirement that the Contractor's Equipment is
kept on Site (Sub-Clause 54.1), the majority of international contracts require the Contractor to provide a financial security entitling the Employer to some form of monetary compensation in the event that the Contractor fails to execute the Contract satisfactorily.
Such security may take various forms depending among other things upon the requirements of the Employer and the types of security available.
If such security is to be provided, the form must be annexed to the Conditions. Two example forms of performance security are given on pages 7, 8 and 9 of the second volume of the Red Book comprising Part II. The Clause and the wording of the example forms may have to be varied to comply with applicable law and practice. The amount of the security is customarily expressed as a percentage of the Contract Price but the percentage may vary from project to project Performance guarantees for inter-
national contracts are usually ten percent of the Contract Price whereas surety bonds which guarantee completion of the Contract are usually set at a much higher percentage. It should be noted that the Employer holding a surety bond cannot call upon the surety for payment of a sum of money - he calls for completion of the Contract. Where there is provision in the Contract for payments to the Contractor to be made in foreign currency, Sub-Clause 10.1 may need to be varied. As an example,the following addition could be made in Part II to Sub-Clause 10.1: ©FIDIC 1989
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Performance 10.1
Security
Period of 10.2 Validity of Performance Security
Add the following after the first sentence: The security shall be denominated in the types and proportions of currencies stated in the Appendix to Tender. The performance security shall be valid until the Con-
tractor has executed and completed the Works and remedied any defects therein in accordance with the Contract. No claim shall be made against such security
after the issue of the Defects Liability Certificate in accordance with Sub-Clause 62.1 and such security shall be returned to the Contractor within 14 days of the issue of the said Defects Liability Certificate.
In contrast to previous editions, the Sub-Clause contains stipulations covering the period of validity of the security, the time limit for making claims and the time limit for the return of the security to the Contractor.
Claims under 10.3 Performance
Security
Prior to making a claim under the performance security the Employer shall, in every case, notify the Contractor stating the nature of the default in respect of which the claim is to be made.
A further difference from previous editions is that the Employer, prior to making a claim, is required to notify the Contractor stating the nature of the breach (default) in respect of which the claim is to be made. During the drafting, the possibility of including a period of notice was examined but it was considered that such a provision might impede the
use of the Conditions. Normal practice is that when the Contractor is notified of any default, he is given an opportunity to remedy it prior to a claim under the security being made. Where restrictions on the source of the security are imposed this should be dealt with by adding an additional Sub-Clause to Clause 10 in Part II. Examples are:
Source of 10.4 Performance Security
The performance security, submitted by the Contractor
Source of 10.4 Performance Security
Where the security is in the form of a bank guarantee, it shall be issued by:
in accordance with Sub-Clause 10.1, shall be furnish by an institution registered in (insert the country where the Works are to be executed) or licensed to do business in such country.
or
(a) a bank located in the country of the Employer, or
(b) a foreign bank through a correspondent bank located in the country of the Employer.
FIDIC does not advocate the use of on-demand guarantees. As such guarantees can be called without justification, their use is likely to increase the tender sum to reflect this risk.
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Inspection 11.1
of Site
The Employer
shall have made available to the Contracbefore the submission by the Contractor of the Tentor, der, such data on hydrological and sub-surface condi-
tions as have been obtained by or on behalf of the
Employer from investigations undertaken relevant to the
Works but the Contractor shall be responsible for his own interpretation thereof The Contractor shall be deemed to have inspected and examined the Site and its surroundings and information available in connection therewith and to have satisfied himself (so far as is practicable, having regard to con-
siderations of cost and time) before submitting his Tender, as to:
(a) the form and nature thereof, including sub-surface conditions,
(b) the hydrological and climatic conditions,
(c) the extent and nature of work and materials necessary for the execution and completion of the Works and the remedying of any defects therein, and (d) the means of access to the Site and the accommodation he may require
and, in general, shall be deemed to have obtained all necessary information, subject as above mentioned, as to risks, contingencies and all other circumstances which may influence or affect his Tender.
The Contractor shall be deemed to have based his Tender on the data made available by the Employer and on his own inspection and examination, all as aforementioned.
During the preliminary stages of a project the Employer and his Engineer will have collected data upon which to base designs, cost estimates, contract documents and drawings. It is in the interests of the Employer to have the design of the Permanent
Works properly developed and for this reason he would be well advised to have carried out as thorough an investigation of the Site as is practicable. In that way he will determine the extent of the investigation he considers necessary and will pay only for the one investigation. If tenderers were regularly obliged to undertake expensive inves-
tigations, they would have to include in their tender price the investigation costs for unsuccessful tenders which would result in generally higher tender prices to Employers.
Moreover, tenderers are usually given a limited period in which to prepare tenders and
it is impracticable, and in many cases impossible, for them to carry out a full site investigation programme, particularly sub-surface exploration involving drilling and sub-seabed investigations for dredging, in the time available.
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For these reasons this Clause provides that the Employer shall make available all data at his disposal when issuing invitations to tender. Some of the information made available by the Employer may be too bulky to distribute or it may be available at a central point (e.g., borehole cores) or it may only be available on film or tape or in reference volumes such as hydrological and meteorological records. In such cases the Contract must include an additional Sub-Clause in Part II indicating where the information can be inspected. The following is an example of such a Sub-Clause:
Access to Data
11.2
Data made available by the Employer in accordance with Sub-Clause 11.1 shall be deemed to include data listed elsewhere in the Contract as open for inspection at (insert particulars of the office or offices where such data is stored).
However, the Clause presupposes specifically that the Contractor should visit the Site and collect such further information as may be required for the preparation of his tender. The Contractor will be expected to have checked upon the availability of the materials and the labour he needs to execute the Works. He will also be expected to take samples of materials from borrow areas or make test pits, as he may determine to be necessary. Further, he must check among other things the conditions for transportation to the Site.
Where the Contract comprises dredging and reclamation work it may be appropriate to vary Sub-Clause 11.1 by an entry in Part II as follows:
Inspection of Site
11.1
In the first paragraph, delete the words 'hydrological and sub-surface' and substitute 'hydrographic and sub-sea-
bed'. In the second paragraph, under (a) delete the word 'subsurface' and substitute 'sub-seabed' and under (b) delete the word 'hydrological' and substitute 'hydrographic".
Sufficiency
of Tender
12.1
The Contractor shall be deemed to have satisfied him-
self as to the correctness and sufficiency of the Tender
and of the rates and prices stated in the Bill of Quantities, all of which shall, except insofar as it is otherwise provided in the Contract, cover all his obligations under the Contract (including those in respect of the supply of goods, materials, Plant or services or of contingencies for which there is a Provisional Sum) and all matters
and things necessary for the proper execution and completion of the Works and the remedying of any defects therein.
Both Sub-Clauses within Clause 12 have links with Clause 11. Sub-Clause 12.1 emphasises that the tenderer is deemed to have made a thorough investigation of the Site and its surroundings as far as was practicable within the time allowed for the preparation of his tender.
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Adverse 12.2 Physical Obstructions or Conditions
If, however, during the execution of the Works the Contractor encounters physical obstructions or physical conditions, other than climatic conditions on the Site, which obstructions or conditions were, in his opinion, not foreseeable by an experienced contractor, the Contractor shall forthwith give notice thereof to the Engineer, with a copy to the Employer. On receipt of such notice, the Engineer shall, if in his opinion such obstruc-
tions or conditions could not have been reasonably
foreseen by an experienced contractor, after due consultation with the Employer and the Contractor, determine:
(a) any extension of time to which the Contractor is entitled under Clause 44, and (b) the amount of costs which may have been incurred by the Contractor by reason of such obstructions or conditions having been encountered, which shall be added to the Contract Price, and shall notify the Contractor accordingly, with a copy to the Employer. Such determination shall take account of any instruction which the Engineer may issue to the Contractor in connection therewith, and any proper and reasonable measures acceptable to the Engineer which the Contractor may take in the absence of specific instructions from the Engineer.
In spite of the pre-tender investigations of the Site by the parties, the Contractor may encounter unforeseen physical obstructions or physical conditions. Sub-Clause 12.2 lays down the procedure to be applied to such situations. The Contractor is required to give the earliest possible notice to the Engineer. If the Engineer is of the opinion that such obstructions or conditions could not reasona-
bly have been foreseen, he may after consultation with the Employer and Contractor determine an extension of time to be allowed to the Contractor and any additional costs to be added to the Contract Price.
Where the Contract comprises dredging and some types of reclamation work this Sub-Clause may require to be varied in Part II in the following manner:
Adverse 12.2 Physical Obstructions
Delete the words 'other than the climatic conditions on the Site'.
Work to be in 13.1
Unless it is legally or physically impossible, the Contractor shall execute and complete the Works and rem-
with Contract
edy
or Conditions
Accordance
any defects therein in strict accordance with the Contract to the satisfaction of the Engineer. The Contractor shall comply with and adhere strictly to the Engineer's instructions on any matter, whether mentioned in the Contract or not, touching or concerning the Works. The Contractor shall take instructions only from the Engineer or, subject to the provisions of Clause 2, from the Engineer's Representative. ©FIDIC 1989
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This Sub-Clause should be read in conjunction with Clause 8 which stipulates that it is the Contractor's duty to execute the Works in accordance with the Contract and that he has the full responsibility for all Site operations and methods of construction. However, when a problem arises, prompt action may be required. This Sub-Clause is central to the management of the Contract in that it gives the Engineer authority to determine whether, for example, certain work has the quality and dimensions prescribed by the Contract, whether a programme is sufficient to ensure timely completion or whether a payment is due. In turn this authority of the Engineer must be exercised in accordance with Sub-Clause 2.6. Sub-Clause 13.1 obliges the Contractor to comply with and adhere strictly to the Engi-
neer's instructions and, by signing the Contract, the parties agree to abide by the Engineer's interpretation of the Contract unless and until varied under the provisions of Clause 67.
The authority of the Engineer to issue instructions is very wide. He may instruct the Contractor to do any work under the Contract which he considers necessary for the Works, but he should consider carefully whether additional money and/or time is justified within the terms of the Contract.
Programme to 14.1 be Submitted
The
Contractor shall, within the time stated in Part II
of these Conditions after the date of the Letter of Accep-
tance, submit to the Engineer for his consent a programme, in such form and detail as the Engineer shall reasonably prescribe, for the execution of the Works. The Contractor shall, whenever required by the Engineer, also provide in writing for his information a general description of the arrangements and methods which the Contractor proposes to adopt for the execution of the Works.
Tenderers will normally have been required to submit with their tenders a preliminary programme for the execution of the Works with a list of the major items of Contractor's
Equipment, a forecast of labour and staff and of the incidence of expenditure in various currencies (if applicable) during the Contract period. This information is essential for evaluation of the tenders and particularly for establishing that tenderers have correctly appreciated the activities required to ensure compli-
ance with the Time for Completion. It is also required in order to ascertain how
the phasing of operations affects any other contracts and any activities of the Employer of which tenderers may not be aware. However, this information is usually not incorporated into the Contract on award.
Once the Contract has been awarded an accurate and up to date programme assists all involved in the ordering and allocation of resources and so contributes to the successful conclusion of the Contract.
The earlier the programme is produced, the better will be the flow of information, but in stating in Part lithe time within which it is to be provided, the Engineer should have regard to the detailed work which the Contractor has to do after the Contract award. Too short a period will lead to the preparation being done in a hurry with the consequent risk of inaccuracies. The programme is needed for monitoring progress and for enabling the Engineer to make arrangements for the provision of Drawings, instructions, etc., under Clause 6, the timing of nominated Subcontracts under Clause 59, the discharge of the Contractor's duty under Clause 46 and the coordination with other contractors engaged in the project dealt with in Clause 31. 62
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Depending upon the length of the construction period it may be appropriate to plan the immediate period in detail and later periods in general terms and update and refine the programme at regular intervals, for example every three months. If later, claims are
submitted by the Contractor, the programme will probably be of assistance in their evaluation.
In considering the programme, the Engineer should comment to the Contractor on any aspect which does not appear to be in conformity with the Contract, but the Contractor
has control over the provision of resources (labour, Contractor's Equipment and
materials) needed to carry out the Works in accordance with Clause 13. If the Works are not proceeding in accordance with the programme, and the Engineer requires the
programme to be updated, it is important that any extension of time to which the Contractor is entitled under Clause 44 should be determined before the revised programme is considered. Accordingly, it is important that the Contractor complies with Sub-Clause 44.2. Failure to observe this point may complicate the assessment of
any extra payments to which the Contractor may be entitled on this account. As stated above an entry is required in Part II stating the time within which the programme is required to be submitted to the Engineer for his consent. This differs from
previous editions as the programme, in the third and preceding editions, was required to be submitted to the Engineer for his approval. The programme is the reponsibility of the Contractor and it is submitted to the Engineer for constructive comment i.e., if the Engineer considers the Contractor's submission to be unclear or inadequate the Engineer will inform the Contractor of his views and in practice they will usually meet to discuss the Engineer's comments. The Engineer should not give consent to a programme which is unrealistically optimistic.
The Engineer has discretion to call for information on the Contractor's arrangements and methods of working, and will normally do so for major Temporary Works and construction operations. The Engineer will ordinarily scrutinise this information with reference to safety and the effect that such arrangements and methods may have on the Permanent Works and will satisfy himself that if the work is carried out as proposed, the programme can be achieved. He will draw to the attention of the Contractor any matters which cause him concern.
Hence, the Engineer monitors the progress of the Works on behalf of the Employer but is not entitled to alter or interfere with the Contractor's obligation to complete the Works safely, properly and on time.
As stated above, it is necessary for an entry to appear in Part II stating the time within which the programme is to be submitted and the following is an example of a suitable entry:
Programme to 14.1 be Submitted
Revised Programme
14.2
The time within which the programme shall be submitted shall be (insert number) days.
If at any time it should appear to the Engineer that the
actual progress of the Works does not conform to the
programme to which consent has been given under Sub-
Clause 14.1, the Contractor shall produce, at the request of the Engineer, a revised programme showing the modifications to such programme necessary to ensure completion of the Works within the Time for Completion. © FIDIC 1989
63
If during the execution of the Contract it becomes apparent to the Engineer that the Contractor is not maintaining satisfactory progress in accordance with the programme the Engineer will require the Contractor to produce a revised programme to show how he proposes to complete the Works within the Time for Completion. The Contractor will not be entitled to any additional payment for the preparation of the revised programme as it will have become necessary because of the Contractor's failure to maintain satisfactory progress. The Contractor is obliged under this Sub- Clause to produce a revised programme when so requested by the Engineer.
Cash Flow 14.3 Estimate to be Submitted
The
Contractor shall, within the time stated in Part II
of these Conditions after the date of the Letter of Acceptance, provide to the Engineer for his information a detailed cash flow estimate, in quarterly periods, of all payments to which the Contactor will be entitled under
the Contract and the Contractor shall subsequently supply revised cash flow estimates at quarterly intervals, if required to do so by the Engineer.
The Employer will require a cash-flow estimate to enable him to ensure that funding is available when required. It is also in the interests of the Contractor that the Employer should be aware of the dates when payments are expected to be due to the Contractor. Under this Sub-Clause the obligation of the Contractor to produce such a cash-flow estimate and to up-date it as required by the Engineer is specified. The Contractor should differentiate in this estimate between payments in local and foreign currencies.
It is necessary to state in Part lithe date by which the cash-flow estimate must be submitted and the following is an example of an appropriate entry:
Cash Flow 14.3 Estimate to be Submitted
The time within which the detailed cash-flow estimate shall be submitted shall be (insert number) days.
For the Part II entries in respect of 14.1 and 14.3 it is desirable for consistency with
the rest of the Conditions that the number of days inserted should be a multiple of seven.
Contractor 14.4
not Relieved of Duties or
The submission to and consent by the Engineer of such
programmes or the provision of such general descriptions or cash flow estimates shall not relieve the Con-
tractor of any of his duties or responsibilities under the Contract.
Responsibilities
The submission of the programme by the Contractor to the Engineer does not imply that failure of the Engineer to disapprove the programme relieves the Contractor of his responsibility. The same applies to the submission to the Engineer of the detailed cashflow estimate.
Contractor's Superintendence
15.1
The Contractor shall provide all necessary superintendence during the execution of the Works and as long
thereafter as the Engineer may consider necessary for the proper fulfilling of the Contractor' s obligations under the Contract. The Contractor, or a competent and authorised representative approved of by the Engineer, which approval may at any time be withdrawn, shall give his whole time to the superintendence of the Works.
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©FIDIC 1989
Such authorised representative shall receive, on behalf of the Contractor, instructions from the Engineer or, subject to the provisions of Clause 2, the Engineer's Representative.
If approval of the representative is withdrawn by the Engineer, the Contractor shall, as soon as is practicable, having regard to the requirement of replacing him as hereinafter mentioned, after receiving notice of such withdrawal, remove the representative from the Works and shall not thereafter employ him again on the Works in any capacity and shall replace him by another representative approved by the Engineer.
This Sub-Clause specifies the Contractor's responsibilities for superintendence. The authority of the Engineer to disapprove an individual as Contractor's representative entails very serious responsibilities for the Engineer and such authority should be exercised only by the Engineer and should not be delegated. Clashes of personality on Site can occur and the Engineer himself should take any action required in such a matter. It should be noted that the Contractor is obliged to act if the Engineer so orders.
Where the language in which the Contract documents have been drawn up is not the language of the country in which the Works are to be executed, or where for any other reason it is necessary to stipulate that the Contractor's authorised representative shall be fluent in a particular language, appropriate Sub-Clauses should be added in Part II. The following are examples:
Language 15.2 Ability of Contractor's
The Contractor's authorised representative shall be
fluent in (insert name of language).
Representative or
Interpreter 15.2 to be made Available
Contractor's Employees
If the Contractor's authorised representative is not, in
the opinion of the Engineer, fluent in (insert name of language), the Contractor shall have available on Site at
all times a competent interpreter to ensure the proper transmission of instructions and information. 16.1
The Contractor shall provide on the Site in connection
with the execution and completion of the Works and the remedying of any defects therein
(a) only such technical assistants as are skilled and experienced in their respective callings and such foremen and leading hands as are competent to give proper superintendence of the Works, and (b) such skilled, semi-skilled and unskilled labour as is
necessary for the proper and timely fulling of the Contractor's obligations under the Contract.
This Sub-Clause specifies certain requirements in regard to the staff and labour force employed by the Contractor on the Site. © FIDIC 1989
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Engineer at 16.2 Liberty to Object
The Engineer shall be at liberty to object to and require the Contractor to remove forthwith from the Works any
person provided by the Contractor who, in the opinion
of the Engineer, misconducts himself, or is incompetent or negligent in the proper performance of his duties, or whose presence on Site is otherwise considered by the Engineer to be undesirable, and such person shall not be again allowed upon the Works without the consent of the Engineer. Any person so removed from the Works shall be replaced as soon as possible.
As in the case of the Contractor's authorised representative the Engineer has the power to order the removal from the Site of any member of the Contractor's labour force. It is reiterated that such decisions should be taken by the Engineer and should not be delegated.
Where the language in which the Contract documents have been drawn up is not the language of the country in which the Works are to be executed, or where for any other reason it is necessary to stipulate that members of the Contractor's superintending staff shall be fluent in a particular language, a Sub-Clause in the following terms may be added
in Part II:
Language Ability of Superintending Staff
16.3 A reasonable proportion of the Contractor's superintend-
ing staff shall have a working knowledge of (insert name
of language) or the Contractor shall have available on Site at all times a sufficient number of competent inter-
preters to ensure the proper transmission of instructions and information.
Where there is a desire, but not a legal requirement, that the Contractor makes reasonable use of persons resident in the country in which the Works are to be executed, an additional Sub-Clause in the following terms may be added in Part II:
Employment 16.4
of Local Personnel
The Contractor is encouraged, to the extent practicable and reasonable, to employ staff and labour from sources
within (insert name of country).
See the commentary to Sub-Clause 36.1 where reference is made to the use of local materials.
Setting-out
17.1
The Contractor shall be responsible for.
(a) the accurate setting-out of the Works in relation to original points, lines and levels of reference given by the Engineer in writing,
(b) the correctness, subject as above mentioned, of the position, levels, dimensions and alignment of all parts of the Works, and
(c) the provision of all necessary instruments, appliances and labour in connection with the foregoing responsibilities.
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If, at any time during the execution of the Works, any
error appears in the position, levels, dimensions or alignment of any part of the Works, the Contractor, on being required to do so by the Engineer, shall, at his own cost, rectify such error to the satisfaction of the Engineer, unless such error is based on incorrect data supplied in writing by the Engineer, in which case the Engineer shall determine an addition to the Contract Price in accordance with Clause 52 and shall notify the Contractor accordingly, with a copy to the Employer.
The checking of any setting-out or of any line or level by the Engineer shall not in any way relieve the Contractor of his responsibility for the accuracy thereof and the Contractor shall carefully protect and preserve all bench-marks, sight-rails, pegs and other things used in setting-out the Works.
The Engineer supplies the Contractor with the essential information upon which the setting out of the Works by the Contractor is to be based. This information will normally consist of a coordinated reference point, a datum level and a bearing. Rectification costs resulting from incorrect data supplied by the Engineer are recoverable by the Contractor from the Employer should it be established that the data supplied by the Engineer was incorrect.
Boreholes and 18.1 Exploratory Excavation
If, at any time during the execution of the Works, the Engineer requires the Contractor to make boreholes or to carry out exploratory excavation, such requirement shall be the subject of an instruction in accordance with Clause 51, unless an item or a Provisional Sum in respect of such work is included in the Bill of Quantities.
This Sub-Clause deals with additional exploratory operations and how payment should be made for them. There are various means of dealing with the payment. It may be dealt with as a variation under Clause 51, a progress payment under an item in the Bill of Quantities or a payment under a Provisional Sum which, in accordance with Sub-Clause 58.2, will be either under Clause 52 or Sub-Clause 59.4.
Where the Contract comprises dredging and reclamation work this Sub-Clause may require to be varied in Part II in the following manner:
Boreholes 18.1 Exploratory Excavation
Safety, 19.1 Security and Protection of the Environment
Add second sentence as follows: Such exploratory excavation shall be deemed to include dredging.
The Contractor shall, throughout the execution and completion of the Works and the remedying of any defects therein: (a) have full regard for the safety of all persons entitled to be upon the Site and keep the Site (so far as the same is under his control) and the Works (so far as the same are not completed or occupied by the Employer) in an orderly state appropriate to the avoidance of danger to such persons, and
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(b) provide and maintain at his own cost all lights, guards,fencing, warning signs and watching, when and where necessary or required by the Engineer or by any
duly constituted authority, for the protection of the
Works or for the safety and convenience of the public or others, and (c) take all reasonable steps to protect the environment on and off the Site and to avoid damage or nuisance to persons or to property of the public or others resulting from pollution, noise or other causes arising as a consequence of his methods of operation. This Sub-Clause provides that the Contractor is responsible for the safety of persons on Site and for installation of such facilities as will protect the Works, the public and the environment from injury or damage.
Depending upon the location of the Works in relation to public services and upon the size of the Works, it may be appropriate to elaborate specifically on the Contractor's obligation to provide fire protection equipment and organisation. Where the Contract includes dredging the possibility of pollution should be given particular attention and additional wording may be required. For example, where fishing and recreation areas might be affected, the Contractor should be required to plan and execute the dredging so that the impact thereof is kept to a minimum. Where there is a risk of chemical pollution from soluble sediments in the dredging area, for instance in a
harbour, it is important that sufficient information is provided with the tender documents and that responsibilities are clearly and unambiguously defined. The appropriate text should be included in Part II.
Employer's 19.2 Responsibilities
If under Clause 31 the Employer shall carry out work
on the Site with his own workmen he shall, in respect of
such work:
(a) have full regard to the safety of all persons entitled to be upon the Site, and
(b) keep the Site in an orderly state appropriate to the avoidance of danger to such persons.
If under Clause 31 the Employer shall employ other contractors on the Site he shall require them to have the same regard for safety and avoidance of danger.
This Sub-Clause stipulates that the Employer shall have obligations similar to those of the Contractor in respect of work he is carrying out with his own workmen on the Site and cause other contractors who execute work for him on the Site to assume such obligations in respect of their work.
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ALLOCATION OF RESPONSIBILITY AND INSURANCE OBLIGATIONS Clause 20 allocates responsibility between the Contractor and the Employer for damage
which may be suffered by the Works. The Contractor is to bear the cost of rectification of loss or damage which arises from any cause, other than those which are described as 'Employer's Risks'. Where damage is caused by an Employer's Risk there is an obligation upon the Contractor, if requested by the Engineer, to rectify, but the costs of such work are to be borne by the Employer. This allocation of responsibility is effective from the commencement of the Works until the issue of the Taking-Over Certificate. In addition, the Contractor is responsible for materials he may be required to supply and for the care of outstanding work which he may be required to complete under the terms of the Defects Liability Period obligations.
The Contractor is also liable for damage which he may do to the Works while on the Site for the purpose of complying with his obligations under Clauses 49 and 50.
Care of 20.1 Works
The Contractor shall take full responsibility for the care ofthe Works and materials and Plant for incorporation therein from the Commencement Date until the date of issue of the Taking-Over Certificate for the whole of the Works, when the responsibility for the said care shall pass to the Employer. Provided that:
(a) if the Engineer issues a Taking-Over Certificate for any Section or part of the Permanent Works the Con-
tractor shall cease to be liable for the care of that Section orpartfrom the date of issue of the Taking-Over Certificate, when the responsibility for the care of that Section or part shall pass to the Employer, and
(b) the Contractor shall take full responsibility for the care of any outstanding Works and materials and Plant for incorporation therein which he undertakes to finish during the Defects Liability Period until such outstanding Works have been completed pursuant to Clause 49. This Sub-Clause, which specifies the responsibilities of the Contractor in regard to the Works, clearly states that these responsibilities continue until the 'date of issue of the Taking-Over Certificate', as distinct from the date of taking over stated in the Certificate. This makes it clear at what point in time the obligations change in cases where taking over has been backdated.
Responsibility 20.2 to Rectify Loss or Damage
If any loss or damage happens to the Works, or any part thereof, or materials or Plant for incorporation therein, during the period for which the Contractor is responsible for the care thereof, from any cause whatsoever,
other than the risks defined in Sub-Clause 20.4, the Contractor shall, at his own cost, rectify such loss or damage so that the Permanent Works conform in every respect with the provisions of the Contract to the satis-
faction of the Engineer. The Contractor shall also be liable for any loss or damage to the Works occasioned by him in the course of any operations carried out by him for the purpose of complying with his obligations under Clauses 49 and 50. © FIDIC 1989
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This Sub-Clause establishes the Contractor's obligation to make good any defects for which he has responsibility under Sub-Clause 20.1.
Loss or 20.3 Damage Due to Employer's Risks
In the event of any such loss or damage happening from any of the risks defined in Sub-Clause 20.4, or in cornbination with other risks, the Contractor shall, f and to the extent required by the Engineer, rectify the loss or damage and the Engineer shall determine an addition to the Contract Price in accordance with Clause 52 and shall notify the Contractor accordingly, with a copy to
the Employer. In the case of a combination of risks causing loss or damage any such determination shall take into account the proportional responsibility of the Contractor and the Employer. As stated in the introductory comments to Clause 20, the Contractor has a responsibility to make good damage which occurs from Employer's Risks but shall recover from the Employer the cost of making good such damage. The amount to be recovered by the Contractor shall be determined by the Engineer.
Employer's 20.4 iS S
The Employer's Risks are:
(a) war, hostilities (whether war be declared or not), invasion, act of foreign enemies,
(b) rebellion, revolution, insurrection, or military or usurped power, or civil war, (c) ionising radiations, or contamination by radio-activ-
ity from any nuclear fuel, or from any nuclear waste from the combustion of nuclear fuel, radio-active toxic explosive, or other hazardous properties of any explosive nuclear assembly or nuclear component thereof,
(d) pressure waves caused by aircraft or other aerial devices travelling at sonic or supersonic speeds, (e) riot, commotion or disorder, unless solely restricted to employees of the Contractor or of his Subcontractors and arising from the conduct of the Works, (f) loss or damage due to the use or occupation by the
Employer of any Section or part of the Permanent Works, except as may be provided for in the Contract,
(g) loss or damage to the extent that it is due to the design of the Works, other than any part of the design provided by the Contractor or for which the Contractor is responsible, (h) any operation of the forces of nature against which an experienced contractor could not reasonably have been expected to take precautions.
This Sub-Clause lists certain risks which are outside the control of the Contractor. These risks were referred to in the previous edition as 'excepted risks' but this was a confusing title as it was sometimes taken to be 'accepted risks'. The term 'Employer's Risks' has been used in the fourth edition for clarity. 70
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There are two particular changes in these risks from those in the third edition.
20.4
(g)
loss or damage to the extent that it is due to the
design of the Works, other than any part of the design provided by the Contractor or for which the Contractor is responsible,
The third edition included in the 'excepted risks' a cause solely due to the Engineer's design of the Works. It has been decided to change this so that the Contractor is only responsible for errors in the designs for which he has been responsible. This is considered to be more balanced than was the third edition. It is now possible to establish design responsibility from the outset, rather than applying a test after the event (i.e., was there contribution to the error by another party or was it solely caused by the Engineer?). In practice that question was exceedingly difficult to answer. Should damage occur to the Works in circumstances where an error in design is a contributory factor, the Contractor is only relieved of responsibility to the extent that the
damage was caused by a design not provided by him.
20.4
(h) any operation of the forces of nature against which
an experienced contractor could not reasonably have been expected to take precautions. This Sub-Clause has removed two difficulties. The third edition referred to risks which could not be foreseen, although it could be argued that all risks of the forces of nature can be foreseen. The third edition also referred to risks from the forces of nature which could not be insured against. The Sub-Clause is concerned with very unlikely risks,
whereas it is these very unlikely risks for which insurance is generally available. The words 'could not insure against' have been removed as this test is difficult to apply. Insurance against a particular risk of nature may be available but only at an exorbitant premium. Conversely, insurers may not offer cover against a risk which they feel is almost certain to arise because of the nature or location of the Works.
Under the fourth edition the Contractor is not responsible if the Works are damaged by an operation of the forces of nature against which he could not reasonably have been expected to take precautions, i.e., a risk that is so unlikely that it would not be reasonable to spend time and money in taking precautions.
Insurance of 21.1 Works and Contractor's Equipment
The Contractor shall, without limiting his or the Em-
ployer's obligations and responsibilities under Clause 20, insure:
(a) the Works, together with materials and Plant for
incorporation therein, to the full replacement cost (b) an additional sum of 15 per cent of such replacement cost, or as may be specified in Part II of these Conditions, to cover any additional costs of and incidental to the rectification of loss or damage including professional fees and the cost of demolishing and removing any part of the Works and of removing debris of whatsoever nature (c) the Contractor's Equipment and other things brought onto the Site by the Contractor, for a sum sufficient to provide for their replacement at the Site. ©FIDIC 1989
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This Sub-Clause sets out the requirements for insurance of the Works and of the Contractor's Equipment. The fact that insurance is in force does not alter the obligations of both parties as defined in Clause 20. Although the insurance is to be for full replacement cost, it is not always necessary to insure for the replacement of an entire project, particularly if there is a wide geographical spread of work or if, for some other reason, it is felt that it would never be necessary to replace the whole of the project. It is the intention that a 'First Loss' value would be acceptable - that is, a sum less than the full value of the project, but sufficient to provide for the cost of repair of the most serious damage envisaged. Where there is provision in the Contract for payments to the Contractor to be made in foreign currency, it may be appropriate to vary the Sub-Clause by an entry in Part II as follows:
Insurance of 21.1 ,Worksan,d .1n1rac1ors qu P e
Add final sentence as follows: The insurance in paragraphs (a) and (b) shall provide
for compensation to be payable in the types and proportions of currencies required to rectify the loss or damage incurred. It is advisable in the interests of equitable tendering that the deductible limits for the Employer's Risks are stated in the Tender documents. To this end this Sub-Clause may be varied in Part II in the following manner.
Insurance of 21.1 Add to paragraph (a) as follows: Works an,d and with deductible limits for the Employer's Risks not Contractor s exceeding (insert amounts). Equipment
It may also be considered appropriate to state in the Tender documents other factors, such as the total cover required, relating to Employer's Risks.
Sco e of 21.2 over
The insurance in paragraphs (a) and (b) of Sub-Clause 21.1 shall be in the joint names of the Contractor and
the Employer and shall cover: (a) the Employer and the Contractor against all loss or damage from whatsoever cause arising, other than as provided in Sub-Clause 21.4, from the start of work at the Site until the date of issue of the relevant TakingOver Certificate in respect of the Works or any Section or part thereof as the case may be, and (b) the Contractor for his liability:
(i) during the Defects Liability Period for loss or damage arising from a cause occurring prior to the commencement of the Defects Liability Period, and (ii) for loss or damage occasioned by the Contractor in the course of any operations carried out by him for the purpose of complying with his obligations under Clauses 49 and 50.
Previously the Contractor was to insure the Works against those risks of damage for which he was responsible. However, some of the Employer's Risks were also insurable, notably damage resulting from design errors and from the forces of nature. For a project to be fully insured, it was therefore theoretically necessary for the Employer to take out a second policy, on the same project, to cover his risks. 72
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Modem practice is to avoid the problems of two parallel policies applying to the same project, by having a single policy in the joint names of both parties, and insuring each party for his risks. The fourth edition provides for this and has the effect of making the Contractor responsible for insuring against all risks that can be insured.
Contract Works insurance is not generally available for the costs of rectification of defects. The insurance relates to the costs of the repair of the damage which results from the defect. In insurance terminology this is known as 'resultant damage'. It should be noted that Sub-Clause 21.2 requires the insurance to be against 'loss or damage' and not for the part of the work which was itself defective. The insurance of the Works is to be in the joint names of the Employer and the Contractor. However, during the Defects Liability Period the insurance is only against that damage which the Contractor is required to repair under the terms of the Defects Liabil-
ity Clause, and so the Employer has no insurable interest in this part of the policy. This section of the insurance could, therefore, be in the name of the Contractor alone.
Similarly, the Employer may not have an insurable interest in the Contractor's Equipment, and so this is insured in the name of the Contractor. The Employer will wish to be certain that the Contractor has arranged these insurances, but the Employer would not be in a position to receive the insurance monies himself directly, should there be damage. Although it is not a requirement of the Clause, there may be cases where it is decided to include the name of the Engineer as a joint insured in the policy which is to be arranged pursuant to Sub-Clause 21.2. In many cases, the inclusion of the Engineer as a joint insured may have little effect on the premium.
The Contractor's obligation to insure begins "from the start of work at the Site" - see sub-para 21.2(a). Where a Contract contains a substantial Plant element or on any Contract where it is anticipated that there may be significant exposure before work starts at Site, consideration should be given to varying Clause 21 to ensure that the risks are covered.
One way of avoiding any 'gap' in cover might be to alter sub-para 21.2(a) by replacing the wording quoted above with "from the Commencement Date". However, such a change could lead to complications in arranging insurance and other wording might be more appropriate in the context of a particular contract. It should also be borne in mind that a change linking insurance to the Commencement Date could result in some delay in the issue by the Engineer of a notice to commence in accordance with Sub-Clause 41.1. The definition of Commencement Date - see sub-para 1.1 (c)(i) - relates the date to the Engineer's notice. It might take the Contractor a little time to effect the insurance and the Engineer might feel obliged to satisfy himself that the Employer had received evidence of insurance before he (the Engineer) issued the notice. A delay in the issue of
the notice to commence would, in many cases, not be in the interests of either the Employer or the Contractor. Whatever course is adopted, it would be prudent to take the advice of an insurance expert before determining the exact wording to use in order to be confident that the requisite insurance could be obtained. Furthermore, any change made to Sub-Clause 21.1 might also require a change to Sub-Clause 25.1 in order to maintain consistency.
Responsibility 21.3 Any amounts not insured or not recovered from the insurers shall be borne by the Employer or the Contracfor Amounts
not Recovered
tor in accordance with their responsibilities under Clause 20.
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If the sum selected for insurance proved to be insufficient to pay for the replacement then there would be a breach of Sub-Clause 21.1. The party responsible under Clause 20 for the costs of the repair would be unable to recover the deficiency from the insurance but would nevertheless be responsible for making good the damage.
Exclusions 21.4
There shall be no obligation for the insurances in Sub-
Clause 21.1 to include loss or damage caused by (a) war, hostilities (whether war be declared or not), invasion, act of foreign enemies, (b) rebellion, revolution, insurrection, or military or usurped power, or civil war, (c) ionising radiations, or contamination by radio-activity from any nuclear fuel, or from any nuclear waste from the combustion of nuclear fuel, radio-active toxic explosive, or other hazardous properties of any explosive nuclear assembly or nuclear component thereof, (d) pressure waves caused by aircraft or other aerial devices travelling at sonic or supersonic speeds. This Sub-Clause permits the exclusion from the insurance of certain risks which cannot normally be insured. In addition to the exclusions listed, some projects may be undertaken where other risks may not be insurable, for example, flood risks when working below water level alongside a river. In these circumstances an amendment appropriate to the particular project should be made in Part II.
Damage to 22.1 Persons and Property
Contractor shall, except if and so far as the Contract provides otherwise, indemnify the Employer against all losses and claims in respect of: (a) death of or injury to any person, or (b) loss of or damage to any property (other than the The
Works), which may arise out of or in consequence of the execution and completion of the Works and the remedying of any defects therein, and against all claims, proceedings,
damages, costs, charges and expenses whatsoever in respect thereof or in relation thereto, subject to the exceptions defined in Sub-Clause 22.2. This Sub-Clause requires the Contractor to indemnify the Employer for any claims that
may arise from death or injury to third parties, or loss of or damage to any property (other than the Works), as a result of the execution of the Works.
Exceptions 22.2
The "exceptions" referred to in Sub-Clause 22.1 are:
(a) the permanent use or occupation of land by the Works, or any part thereof, (b) the right of the Employer to execute the Works, or
any part thereof, on, over, under, in or through any land, (c) damage to property which is the unavoidable result
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(d) death of or injury to persons or loss of or damage to
property resulting from any act or neglect of the Employer, his agents, servants or other contractors, not being employed by the Contractor, or in respect of any claims, proceedings, damages, costs, charges and expenses in respect thereof or in relation thereto or, where the injury or damage was contributed to by the Contractor, his servants or agents, such part of the said injury or damage as may be just and equitable having regard to the extent of the responsibility of the Employer, his servants or agents or other contractors for the injury or damage. This Sub-Clause sets out the exceptions to the obligation of the Contractor stated in SubClause 22.1.
indemnity by 22,3 Employer
The Employer shall indemnify the Contractor against all claims, proceedings, damages, costs, charges and ex-
penses in respect of the matters referred to in the exceptions defined in Sub-Clause 22.2.
The Contractor is absolved from responsibility if the death, injury or damage arises from
any of the exceptions listed in Sub-Clause 22.2. Where these exceptions apply, the Employer is to indemnify the Contractor against any claims he may receive from third parties.
Third Party 23.1
Insurance
(including Employer's Property)
Contractor shall, without limiting his or the Employer's obligations and responsibilities under Clause 22, insure, in the joint names of the Contractor and the The
Employer, against liabilities for death of or injury to any person (other than as provided in Clause 24) or loss of
or damage to any property (other than the Works) arising out of the performance of the Contract, other than the exceptions defined in paragraphs (a), (b) and (c) of Sub-Clause 22.2. The Contractor is to arrange a Third Party insurance, to protect both the Contractor and the Employer against the liabilities described in Clause 22. It is possible that damage or injury may be suffered by a third party as a result of the
negligence of the Employer and it is reasonable that the Contractor should not be required to indemnify the Employer in these circumstances. This is the effect of Sub-Clause 22.2(d). The Third Party liability insurance should protect the Employer in these circumstances and this is the reason why exception (d) is not mentioned in SubClause 23.1.
insurance shall be for at least the amount stated in the Appendix to Tender. The Appendix to Tender should stipulate the minimum amount of insurance to be pro-
Minimum Amount 23.2 of Insurance
Such
vided. However, it is for the Contractor to decide whether the minimum amount is sufficient and, if he considers it necessary, to insure for a greater amount. The policy should cover an unlimited number of claims in any one year.
Cross 23.3
Liabilities
The insurance policy shall include a cross liability clause such that the insurance shall apply to the Con-
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This Sub-Clause stipulates the right of the Employer or the Contractor to act individually in respect of a claim despite the fact that the policy is in their joint names.
Accident or 24.1 Injury to Workmen
The Employer shall not be liable for or in respect of any damages or compensation payable to any workman or
other person in the employment of the Contractor or any Subcontractor, other than death or injury resulting from
any act or default of the Employer, his agents or servants. The Contractor shall indemnify and keep indem-
nified the Employer against all such damages and compensation, other than those for which the Employer is liable as aforesaid, and against all claims, proceedings, damages, costs, charges, and expenses whatsoever in respect thereof or in relation thereto.
The Employer has no responsibility for injuries that may be suffered by employees of
the Contractor, unless such injury results from an act or default of the Employer. In such circumstances the injured person would be regarded as a 'third party' to the Employer and the Employer would have the benefit of the Third Party insurance described in Clause 23. Insurance against accident to workmen is usually regulated by statutory provisions. The
Contractor should consider whether such provisions are sufficient for the Contract.
Insurance 242 The Contractor shall insure against such liability and shall continue such insurance during the whole of the Against Accident to time that any persons are employed by him on the Workmen
Works. Provided that, in respect of any persons employed by any Subcontractor, the Contractor's obligations to insure as aforesaid under this Sub-Clause shall
be satisfied if the Subcontractor shall have insured against the liability in respect of such persons in such manner that the Employer is indemnified under the policy, but the Contractor shall require such Subcontractor to produce to the Employer, when required, such policy of insurance and the receipt for the payment of the current premium. The Contractor is required to insure his liability for death or injury to his own employ-
ees and he should also ascertain that all Subcontractors have similar insurance in force in regard to their employees.
Evidence and 25.1 Terms of Insurances
The Contractor shall provide evidence to the Employer
prior to the start of work at the Site that the insurances required under the Contract have been effected and
shall, within 84 days of the Commencement Date, provide the insurance policies to the Employer. When providing such evidence and such policies to the Employer,
the Contractor shall notify the Engineer of so doing. Such insurance policies shall be consistent with the general terms agreed prior to the issue of the Letter of Acceptance. The Contractor shall effect all insurances for which he is responsible with insurers and in terms approved by the Employer.
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This Sub-Clause contains certain general requirements applicable to the various insurances which are required by the Contract.
Evidence that the insurances have been arranged must be provided by the Contractor prior to the start of work on Site. This evidence might be a cover note or insurance certificate. These documents do not provide sufficient detail to enable the Employer or his insurance adviser to agree the scope of cover and accordingly there is a requirement that the actual policy documents must be provided within 84 days of the Commencement Date.
The general terms of the insurance, particularly levels of excess/deductible, and any additional exclusions, conditions and warranties, should be agreed between the Employer and the Contractor prior to the issue of the Letter of Acceptance.
Adequacy of 25.2 Insurances
The Contractor shall notify the insurers of changes in the nature, extent orprogrammefor the execution of the
Works and ensure the adequacy of the insurances at all times in accordance with the terms of the Contract and shall, when required, produce to the Employer the insurance policies in force and the receipts for payment of the current premiums.
Construction insurance may be invalidated if the insurers are not made aware of changes to the Works. In order to avoid doubt as to who will perform this duty this Sub-Clause
emphasises the obligation of the Contractor to notify the Insurer of changes.
Remedy on 25.3 Contractor's Failure to Insure
If the Contractor fails to effect and keep in force any of
insurances required under the Contract, or fails to provide the policies to the Employer within the period required by Sub-Clause 25.1, then and in any such case the Employer may effect and keep in force any such insurances and pay any premium as may be necessary for that purpose and from time to time deduct the amount so paid from any monies due or to become due to the Contractor, or recover the same as a debt due from the Contractor. the
Should the Contractor fail to arrange or maintain any of the insurances which he is required to provide, then the Employer may do so, but at the cost of the Contractor.
Compliance 25.4 with Policy Conditions
In the event that the Contractor or the Employer fails to comply with conditions imposed by the insurance policies effected pursuant to the Contract, each shall indemnfy the other against all losses and claims arising from such failure.
Insurers may be able to avoid paying claims if certain conditions of the policy, particularly warranties, are breached by either of the insured parties. Sub-Clause 25.4 provides that in these circumstances the party who is in breach of policy conditions shall indemnify the other for any resulting loss.
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INSURANCES ARRANGED BY EMPLOYER
In certain circumstances, such as where a number of separate contractors are employed
on a single project, or phased take-over is involved, it may be preferable for the Employer to arrange insurance of the Works, and third Party insurance. In such case it must be clear in the Contract that the Contractor is not precluded from taking out any additional insurance, should he desire to do so, over and above that arranged by the Employer.
Tenderers must be provided at the Tender stage with details of the insurance to be arranged by the Employer, in order to assess what provision to make in their rates and prices for any additional insurance, and for the amount of policy deductibles which they will be required to bear. Such details shall form part of the Contract between the Employer and the Contractor. The following example clauses for inclusion in Part II provide for the arrangement of insurance by the Employer:
Clause 21 Delete the text of the Clause and substitute the following re-numbered Sub-Clauses:
Insurance
21.1
of Works
Without limiting his or the Contractor's obligations and responsibilities under Clause 20, the Employer will insure:
(a) the Works, together with materials and Plant for incorporation therein, to the full replacement cost
(b) an additional sum to cover any additional costs of and incidental to the rectification of loss or damage
and incidental to the rectification of loss or damage including professional fees and the cost of demolishing and removing any part of the Works and of removing debris of whatsoever nature.
Insurance of 21.2 Contractor's Equipment
The Contractor shall, without limiting his obligations and responsibilities under Clause 20, insure the Contrac-
Scope of 21.3
The insurance in Sub-Clause 21.1 shall be in the joint
Cover
tor's Equipment and other things brought onto the Site
by the Contractor, for a sum sufficient to provide for their replacement at the Site. names
of the Contractor and the Employer and shall
cover:
(a) the Employer and the Contractor against loss or damage as provided in the details of insurance annexed to these Conditions, from the start of work at the Site until the date of issue of the relevant Taking-Over Certificate in respect of the Works or any Section or part thereof as the case may be, and (b) the Contractor for his liability:
(i) during the Defects Liability Period for loss or damage arising from a cause occurring prior to the commencement of the Defects Liability Period, or
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(ii) occasioned by the Contractor in the course of any
operations carried out by him for the purpose of complying with his obligations under Clauses 49 and 50.
Responsibility 21.4 for Amounts not Recovered
Clause
Any amounts not insured or not recovered from the insurers shall be borne by the Employer or the Contractor in accordance with their responsibilities under Clause 20.
23
Delete the text of the Clause and substitute:
Third Party 23.1
Insurance
Without limiting his or the Contractor's obligations and responsibilities under Clause 22, the Employer will in-
in the joint names of the Contractor and the Employer, against liabilities for death of or injury to any person (other than as provided in Clause 24) or loss of or damage to any property (other than the Works) arising out of the performance of the Contract, as provided in the details of insurance referred to in Sub-Clause sure
(including Employer's Property)
21.3.
Clause 25 Delete the text of the Clause and substitute:
Evidence 25.1 and Terms of Insurances
The insurance policies to be arranged by the Employer pursuant to Clauses 21 and 23 shall be consistent with the general terms described in the Tender and copies of
Adequacy 25.2
The Employer shall notify the insurers of changes in the nature, extent or programme for execution of the Works
of Insurances
such
policies shall when required be supplied by the
Employer to the Contractor.
ensure the adequacy of the insurances at all times in accordance with the terms of the Contract and shall, when required, produce to the Contractor the insurance and
policies in force and the receipts for payment of the premiums. No variations shall be made to the insurances by the Employer without the prior approval of the Contractor.
Remedy on 25.3 Employer's Failure to Insure
If and so far as the Employer fails to effect and keep in force any of the insurances referred to in Sub-Clause
Compliance 25.4 with Policy Conditions
In the event that the Contractor or the Employer fails to comply with conditions imposed by the insurance policies effected pursuant to the Contract, each shall indemnify the other against all losses and claims arising from such failure.
25.1, then the Contractor may effect and keep in force any such insurance and pay any premiums as may be
necessary for that purpose and add the amount so paid to any monies due or to become due to the Contractor, or recover the same as a debt due from the Employer.
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OTHER OBLIGATIONS OF THE CONTRACTOR
Compliance 26.1 with Statutes,
Regulations
The Contractor shall conform in all respects, including by the giving of all notices and the paying of all fees,
with the provisions of:
(a) any National or State Statute, Ordinance, or other Law, or any regulation, or bye-law of any local or other duly constituted authority in relation to the execution and completion of the Works and the remedying of any defects therein, and
(b) the rules and regulations of all public bodies and companies whose property or rights are affected or may be affected in any way by the Works, and the Contractor shall keep the Employer indemnified
against all penalties and liability of every kind for
breach of any such provisions. Provided always that the Employer shall be responsible for obtaining any planning, zoning or other similar permission required for the Works to proceed and shall indemnify the Contractor in accordance with Sub-Clause 22.3.
Depending upon the location, the nature and size of the project as well as its status in the country where the Works are to be executed, it may not be in the Employer's best interests to require the Contractor to provide in his tender price for the cost of all local fees, etc., in relation to the Works. However, in order to avoid conflicts or ambiguities, this Sub-Clause requires the Contractor to give all notices and make all payments duly imposed. A supplementary clause in Part II, drafted for the individual project can provide for the Contractor to be reimbursed or exempted from any particular imposition specified therein. Otherwise all fees, etc., will be paid by the Contractor and must be included by him in his tender, with the exception of such costs as are related to the use of the land of the Site as stated in Sub-Clause 22.2 and the consequences of a failure to obtain permission required for the Works to proceed, as mentioned in the final sentence of Sub-Clause 26.1
Fossils
27.1
Allfossils, coins, articles of value or antiquity and struc-
tures and other remains or things of geological or archaeological interest discovered on the Site shall, as between the Employer and the Contractor, be deemed to be the absolute property of the Employer. The Contractor shall take reasonable precautions to prevent his workmen or any other persons from removing or damaging any such article or thing and shall, immediately upon discovery thereof and before removal, acquaint the Engineer of such discovery and carry out the Engineer's instructions for dealing with the same. If, by reason of
such instructions, the Contractor suffers delay and/or incurs costs then the Engineer shall, after due consultation with the Employer and the Contractor, determine:
(a) any extension of time to which the Contractor is entitled under Clause 44, and
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(b) the amount of such costs, which shall be added to the Contract Price, and shall notify the Contractor accordingly, with a copy to the Employer.
For the purpose of the Contract all articles of geological or archeological interest discovered on the Site are considered the property of the Employer. It is the Employer's responsibility to deal with them in accordance with the applicable laws and regulations. The Engineer has an obligation, after consultation with the Employer and the Contractor, to determine whether the Contractor shall be granted an extension of time or additional costs to compensate him for additional work or delay.
Patent 28.1 Rights
The Contractor shall save harmless and indemnify the Employerfrom and against all claims and proceedings
for or on account of infringement of any patent rights, design trademark or name or other protected rights in respect of any Contractor's Equipment, materials or Plant used for or in connection with or for incorporation in the Works and from and against all damages,
costs, charges and expenses whatsoever in respect thereof or in relation thereto, except where such infringement results from compliance with the design or Specification provided by the Engineer. The Contractor is responsible for dealing with patent and other rights and royalties in respect of Plant, materials or Contractor's Equipment. The Contractor is not required to
deal with similar matters arising from the design or specification provided by the Engineer, but where such design or specification includes certain patents this should be stated in the relevant document.
In projects where a substantial element of Plant is to be incorporated in the project, guidance for drafting a supplementary clause for inclusion in Part II can be obtained from Clause 16 of the Yellow Book third edition.
Royalties 28.2
Except where otherwise stated, the Contractor shall pay
all tonnage and other royalties, rent and other payments or compensation, if any,for getting stone, sand, gravel, clay or other materials required for the Works.
Particular conditions may apply in contracts comprising dredging and reclamation work
or any other contract involving the dumping of materials. In the event that the SubClause needs to be varied for such reasons the following entry in Part II may be appropriate:
Royalties 28.2
Add second sentence as follows:
The Contractor shall also be liable for all payments or compensation, if any, levied in relation to the dumping of part or of all of any such materials. It is sometimes the case on dredging contracts that the Employer shall bear the costs of tonnage and other royalties, rent and other payments or compensation. If such conditions
are to apply, Sub- Clause 28.2 should be varied either by adding wording or by deleting the existing wording and substituting new wording. ©FIDIC 1989
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Interference 29.1 with Traffic and Adjoining
Properties
All operations necessary for the execution and completion of the Works and the remedying of any defects
therein shall, as far as compliance with the requirements
of the Contract permits, be carried on so as not to interfere unnecessarily or improperly with. (a) the convenience of the public, or
(b) the access to, use and occupation of public or private roads and footpaths to or of properties whether in the possession of the Employer or of any other person. The Contractor shall save harmless and indemnify the Employer in respect of all claims, proceedings, damages, costs, charges and expenses whatsoever arising out of, or in relation to, any such matters insofar as the Contractor is responsible therefor. This Sub-Clause places an obligation upon the Contractor to limit the interference which his operations may cause to public or private thoroughfares or to properties adjoining the Site. The Sub-Clause should be read in conjunction with Clause 22.
Avoidance 30.1
of Damage
The
Contractor shall use every reasonable means to
prevent any of the roads or bridges communicating with
or on the routes to the Site from being damaged or injured by any traffic of the Contractor or any of his Subcontractors and, in particular, shall select routes,
to Roads
choose and use vehicles and restrict and distribute loads so that any such extraordinary traffic as will inevitably arise from the moving of materials, Plant, Contractor's
Equipment or Temporary Works from and to the Site shall be limited, as far as reasonably possible, and so that no unnecessary damage or injury may be occasioned to such roads and bridges.
The basic principle expressed in this Sub-Clause is that the Contractor is required to use all reasonable care and means to prevent damage to roads or bridges due to exceptional loads or intense traffic, whether the transported goods are materials, Plant, Contractor's Equipment or Temporary Works.
Transport of 30.2 Contractor's Equipment or Temporary Works
insofar as the Contract otherwise provides, the Contractor shall be responsible for and shall pay the
Save
cost of strengthening any bridges or altering or improving any road communicating with or on the routes to the Site to facilitate the movement of the Contractor's
Equipment or Temporary Works and the Contractor shall indemnify and keep indemnified the Employer
against all claims for damage to any such road or bridge caused by such movement, including such claims as may be made directly against the Employer, and shall negotiate and pay all claims arising solely out of such damage.
In the case of transportation of Contractor's Equipment and/or Temporary Works, ordinarily the Contractor shall pay any extra cost as well as indemnify the Employer against any claims arising therefrom.
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Transport of 30.3 Materials or
Plant
If, notwithstanding Sub-Clause 30.1, any damage occurs to any bridge or road communicating with or on the routes to the Site arising from the transport of materials or Plant, the Contractor shall notify the Engineer with a copy to the Employer, as soon as he becomes aware of such damage or as soon as he receives any claim from the authority entitled to make such claim. Where under any law or regulation the haulier of such
materials or Plant is required to indemnify the road authority against damage the Employer shall not be liable for any costs, charges or expenses in respect thereof or in relation thereto. In other cases the Employer shall negotiate the settlement of and pay all sums
due in respect of such claim and shall indemnify the
Contractor in respect thereof and in respect of all claims, proceedings, damages, costs, charges and expenses in relation thereto. Provided that if and so far as any such claim or part thereof is, in the opinion of
the Engineer, due to any failure on the part of the
Contractor to observe and peiform his obligations under
Sub-Clause 30.1, then the amount, determined by the Engineer, after due consultation with the Employer and the Contractor, to be due to such failure shall be recoverable from the Contractor by the Employer and may be deducted by the Employer from any monies due or to
become due to the Contractor and the Engineer shall notify the Contractor accordingly, with a copy to the
Employer. Provided also that the Employer shall notify the Contractor whenever a settlement is to be negotiated and, where any amount may be due from the Contrac-
tor, the Employer shall consult with the Contractor before such settlement is agreed.
For the transportation of materials and/or Plant, if any law or regulation requires the haulier to be responsible for any damage or additional cost due to transport thereof, the Employer shall not be liable. In all other cases, because materials for the Permanent Works and Plant are specified in the Contract and are not solely at the choice of the Contractor, the Employer shall meet the costs and negotiate the settlement except that the Contractor shall repay such parts thereof which could have been avoided with reasonable care (see Sub-Clause 30.1). Subject always that he shall be consulted prior to any negotiated settlement.
Waterborne 30.4 Traffic
Where the nature of the Works is such as to require the use by
the Contractor of waterborne transport the foregoing provisions of this Clause shall be construed as though "road" included a lock, dock, sea wall or other structure related to a waterway and "vehicle" included craft, and shall have effect accordingly.
This Sub-Clause imposes similar conditions on waterborne traffic to those relevant to road transport.
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Opportunities 31.1 for Other Contractors
The Contractor shall, in accordance with the requirements of the Engineer, afford all reasonable opportunities for carrying out their work to:
(a) any other contractors employed by the Employer and their workmen,
(b) the workmen of the Employer, and (c) the workmen of any duly constituted authorities who may be employed in the execution on or near the Site of any work not included in the Contract or of any contract which the Employer may enter into in connection with or ancilliary to the Works. In the case of a complex project, it is not unusual for several contractors of the Employer, workmen of the Employer and, sometimes, workmen from one or more public authori-
ties to be engaged in the execution of the project on the Site simultaneously. In such cases, each contractor of the Employer must allow the others working on the Site
reasonable opportunities for working in accordance with the overall plan for the project and this obligation should be clearly stated in the tender documents. In order
that each contractor can properly pian his particular work, the tender documents for each contract should give maximum information on all other activities which will be going on at the Site at the same time. Where the particular requirements of other contractors are known within reasonable limits at the time of preparation of the Contract documents, details must be stated. The Specification is usually the appropriate place to do so but, exceptionally, some reference may be desirable in the Conditions. In that case, an additional Sub-Clause or Sub-Clauses can be added to this Clause in Part II.
Facilities 31.2 for Other Contractors
If, however, pursuant to Sub-Clause 31.1 the Contractor shall, on the written request of the Engineer: (a)
make available to any such contractor, or to the
Employer or any such authority, any roads or ways for the maintenance of which the Contractor is responsible,
or
(b) permit the use, by any such, of Temporary Works or Contractor's Equipment on the Site, or
(c) provide any other service of whatsoever nature for any such, the Engineer shall determine an addition to the Contract Price in accordance with Clause 52 and shall notify the Contractor accordingly, with a copy to the Employer.
In a project with more than one organisation present on the Site at any one time it is preferable to include in the scope of work of one of the contracts, responsibility for providing necessary facilities and services to contractors under other contracts. Such facilities and services may include housing, water, sewage, electricity, compressed air, use of temporary roads, scaffolding, cranes, storage facilities, office accommodation, hospital beds and medical attention, radio communication and telephone, workshop services, etc. 84
© FIDIC 1989
Normally the main civil works contractor is best equipped to provide the facilities and services required. It is important that the nature and extent of the responsibility for
services as well as the rates and prices therefor are clearly established so that both the supplier and the users can make appropriate allowances in their tenders.
Contractor to 32.1 Keep Site Clear
During the execution of the Works the Contractor shall keep the Site reasonably free from all unnecessary obstruction and shall store or dispose of any Contractor's
Equipment and surplus materials and clear away and remove from the Site any wreckage, rubbish or Temporary Works no longer required.
It is in the best interests of all concerned and particularly in respect of their safety that the Site shall be free of unnecessary obstruction and that the Contractor's Equipment, materials and stores of every sort are maintained in a secure and orderly manner.
Clearance of 33.1 Site on Completion
Upon the issue of any Taking-Over Certificate the Contractor shall clear away and remove from that part of the Site to which such Taking-Over Certificate relates all Contractor's Equipment, surplus material, rubbish and Temporary Works of every kind, and leave such part
of the Site and Works clean and in a workmanlike
condition to the satisfaction of the Engineer. Provided that the Contractor shall be entitled to retain on Site, until the end of the Defects Liability Period, such materials, Contractor's Equipment and Temporary Works as
are required by him for the purpose of fulfilling his obligations during the Defects Liability Period.
This Sub-Clause requires that on completion of any part of the Works, the Contractor clears completely the part of the Site related to the Works which have been completed
so that it can be occupied by the Employer with freedom of operation. Only such materials, Contractor's Equipment and Temporary Works shall be allowed to remain which the Contractor will need for the purpose of remedying defects. This entitlement of the Contractor should be borne in mind by the Engineer at the time of preparation of the tender documents and subsequently when considering the Contractor's methods of operation. The Clause may be amplified or amended in Part II in the event that the Employer wishes to take over part of the Temporary Works and should state the conditions for such taking
over. The state of repair of such Temporary Works should then be stipulated in the Specification.
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LABOUR
Engagement of 34.1 Staff and
Labour
The Contractor shall, unless otherwise provided in the
Contract, make his own arrangements for the engagement of all staff and labour, local or other, and for their
payment, housing, feeding and transport.
This Sub-Clause in Part I is drawn in very general terms and requires elaboration in Part II or in the Specification combined with items included in the Bill of Quantities. The provision of housing and amenities generally on the Site is frequently the cause of argument if the Contract is not explicit in the first instance. It is particularly difficult if there are no established standards for housing and amenities within the country in which the Works are being executed. The Employer and the Engineer should together decide what is necessary, before inviting tenders, and the Specification should include a detailed description of facilities which the Contractor is to provide for the use of the Employer and the Engineer and of the minimum standards he must observe in providing facilities for his own staff and labour, for Subcontractors and other contractors (see the commentary on Clause 31). In setting the requirements as to the facilities which the Contractor should provide, it
should be observed that such facilities are normally of a temporary nature. If,
however, the Employer wishes to take over part of the facilities upon completion of the Works, the conditions therefor should be specified in the Contract. Where such facilities are to become part of the Permanent Works, this should be clearly specified. As stated above, the Part I Clause is drawn in general terms and it will normally be necessary to add a number of Sub-Clauses in Part II, to take account of the circumstances and locality of the Works, covering such matters as: permits and registration of expatriate employees; repatriation to place of recruitment; provision of temporary housing for employees; requirements in respect of accommodation for staff of Employer and Engineer; standards of accommodation to be provided; provision of access roads, hospital, school, power, water, drainage, fire services, refuse collection, communal buildings, shops, telephones; hours and conditions of working; rates of pay; compliance with labour legislation; maintenance of records of safety and health.
The following are example sub-clauses covering some of the more usual provisions. They should be adapted and supplemented in accordance with the requirements of the project and the locality of the Works:
Rates of Wages and Conditions
34.
of Labour
The Contractor shall pay rates of wages and observe conditions of labour not less favourable than those established for the trade or industry where the work is being carried out. In the absence of any rates of wages or conditions of labour so established, the Contractor shall pay rates of wages and observe conditions of labour which are not less favourable than the general level of wages and conditions observed by other employers whose general circumstances in the trade or industry in which the Contractor is engaged are similar.
Employment of Persons in the Service of Others
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34.
The Contractor shall not recruit or attempt to recruit his staff and labour from amongst persons in the service of the Employer or the Engineer.
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Repatriation of Labour
34.
The Contractor shall be responsible for the return to the place where they were recruited or to their domicile of all such persons as he recruited and employed for the purposes of or in connection with the Contract and shall maintain such persons as are to be so returned in a suitable manner until they shall have left the Site or, in the case of persons who are not nationals of and have been recruited outside (insert name of country), shall have left (insert name of country).
Housing for Labour
34.
Save
insofar as the Contract otherwise provides, the
Contractor shall provide and maintain such accommodation and amenities as he may consider necessary for
all his staff and labour, employed for the purposes of or in connection with the Contract, including all fencing,
water supply (both for drinking and other purposes), electricity supply, sanitation, cookhouses, fire prevention and fire-fighting equipment, air conditioning, cook-
ers, refrigerators, furniture and other requirements in connection with such accommodation or amenities. On completion of the Contract, unless otherwise agreed with the Employer, the temporary camps/housing provided by the Contractor shall be removed and the Site reinstated to its original condition, all to the approval of the Engineer.
Accident Prevention Officer; Accidents
34.
Health
34.
and
The Contractor shall have on his staff at the Site an
officer dealing only with questions regarding the safety and protection against accidents of all staff and labour. This officer shall be qualified for this work and shall have the authority to issue instructions and shall take protective measures to prevent accidents.
Safety
Due precautions shall be taken by the Contractor, and at his own cost, to ensure the safety of his staff and labour and, in collaboration with and to the requirements
of the local health authorities, to ensure that medical staff, first aid equipment and stores, sick bay and suitable ambulance service are available at the camps, housing and on the Site at all times throughout the period of the Contract and that suitable arrangements are made for the prevention of epidemics and for all neces-
sary welfare and hygiene requirements.
Measures against Insect and Pest Nuisance
34.
The Contractor shall at all times take the necessary precautions to protect all staff and labour employed on the Site from insect nuisance, rats and other pests and reduce the dangers to health and the general nuisance
occasioned by the same.
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The Contractor shall provide his staff and labour with suitable prophylactics for the prevention of malaria and take steps to prevent the formation of stagnant pools of water. He shall comply with all the regulations of the local health authorities in these respects and shall in particular arrange to spray thoroughly with approved insecticide all buildings erected on the Site. Such treatment shall be carried out at least once a year or as instructed by the Engineer. The Contractor shall warn his staff and labour of the dangers of bilharzia and wild animals.
Epidemics
34.
In the event of any outbreak of illness of an epidemic nature, the Contractor shall comply with and carry out such regulations, orders and requirements as may be made by the Government, or the local medical or sanitary authorities, for the purpose of dealing with and overcoming the same.
Burial of
34.
The Contractor shall make all necessary arrangements
the Dead
for the transport, to any place as required for burial, of any of his expatriate employees or members of their families who may die in (insert country). The Contractor shall also be responsible, to the extent required by local regulations, for making any arrangements with regard to burial of any of his local employees who may die while engaged upon the Works.
Supply of Foodstufts
34.
The Contractor shall arrange for the provision of a sufficient supply of suitable food at reasonable prices for all his staff and labour, or his Subcontractors, for the purposes of or in connection with the Contract.
Supply Water
34.
The Contractor shall, so far as is reasonably practical, having regard to local conditions, provide on the Site an adequate supply of drinking and other water for the use of his staff and labour.
Alcoholic Liquor or Drugs
34.
The Contractor shall not, otherwise than in accordanc with the Statutes, Ordinances and Government Regulalions or Orders for the time being in force, import, sell, give, barter or otherwise dispose of any alcoholic liquor or drugs, or permit or suffer any such importation, sale, gift, barter or disposal by his Subcontractors, agents, staff or labour.
Arms and Ammunition
34.
The Contractor shall not give, barter or otherwise dispose of to any person or persons, any arms or ammunition of any kind or permit or suffer the same as aforesaid.
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Festivals and
34.
Religious Customs Discorderly Conduct
The Contractor shall in all dealings with his staff and labour have due regard to all recognised festivals, days
of rest and or other customs. 34.
The Contractor shall at all times take all reasonable precautions to prevent any unlawful, riotous or disor-
derly conduct by or amongst his staff and labour and for the preservation of peace and protection of persons and property in the neighbourhood of the Works against the same.
Attention is drawn to possible requirements for 'on the job' training of local labour under specified guidelines. When this is required, training should be included as a separate payment item in the Bill of Quantities.
Returns of 35.1 Labour and Contractor's Equipment
The
Contractor shall, if required by the Engineer, deliver to the Engineer a return in detail, in such form and at such intervals as the Engineer may prescribe, showing the staff and the numbers of the several classes of labour from time to time employed by the Contractor on the Site and such information respecting Contractor's Equipment as the Engineer may require.
This Sub-Clause requires the Contractor to provide records of staff, labour and Contractor's Equipment on Site. The information may be needed for reports to local authorities but also, in respect of labour, for the operation of any provision for changes in labour wages and, in respect of Contractor's Equipment, in connection with any advance paid by the Employer, or for control required by customs authorities for import on temporary admission.
The following example Sub-Clauses are typical of those which are frequently added in Part II:
The Contractor shall maintain such records and make such reports concerning safety, health and welfare of persons and damage to property as the Engineer may from time to time prescribe.
Reporting
of Accidents
35.
The Contractor shall report to the Engineer details of any accident as soon as possible after its occurrence. In
the case of any fatality or serious accident, the Contractor shall, in addition, notify the Engineer immediately by the quickest available means.
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MATERIALS, PLANT AND WORKMANSHIP
Quality of 36.1 Materials, Plant and
All materials, Plant and workmanship shall be (a) of the respective kinds described in the Contract and
in accordance with the Engineer's instructions, and
Workmanship
(b) subjected from time to time to such tests as the Engineer may require at the place of manufacture,fabrication or preparation, or on the Site or at such other place or places as may be specified in the Contract, or at all or any of such places.
The Contractor shall provide such assistance, labour, electricity, fuels, stores, apparatus and instruments as are normally required for examining, measuring and testing any materials or Plant and shall supply samples of materials, before incorporation in the Works, for testing as may be selected and required by the Engineer.
This Sub-Clause sets out the requirements of the Contract as to materials, Plant and workmanship in broad outline. These need to be developed in detail in other contract documents, particularly in the Specification. If the Employer wishes to make reference to the utilisation of local materials, an appropriate additional Sub-Clause should be added in Part II.
Cost of 36,2 Samples
All samples shall be supplied by the Contractor at his own cost if the supply thereof is clearly intended by or provided for in the Contract.
The Contractor should make provision in his tender for the cost of supplying samples which are required under the Contract.
Cost of 36.3 Tests
The cost of making any test shall be borne by the Con-
tractor if such test is
(a) clearly intended by or provided for in the Contract,
or
(b) particularised in the Contract (in cases only of a test under load or of a test to ascertain whether the design of any finished or partially finished work is appropriate for the purposes which it was intended to fulfil) in sufficient detail to enable the Contractor to price or allow for the same in his Tender.
This Sub-Clause deals with the question of payment for the cost of carrying out tests to prove compliance with the Specification. It is necessary that the Specification should set out clearly and in detail the samples and tests required by the Employer or the Engineer.
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Cost of 36.4
Tests not
If any test required by the Engineer which is (a) not so intended by or provided for, or
Provided for
(b) (in the cases above mentioned) not so particularised,
or
(c) (though so intended or provided for) required by the
Engineer to be carried out at any place other than the Site or the place of manufacture, fabrication or preparation of the materials or Plant tested, shows the materials, Plant or workmanship not to be in accordance with the provisions of the Contract to the satisfaction of the Engineer, then the cost of such test shall be borne by the Contractor, but in any other case Sub-Clause 36.5 shall apply.
The Engineer may require the Contractor to carry out tests other than those stated in the Specification and the Contractor is obliged to carry out such tests but if the tests do not reveal the Contractor's work to be deficient the Contractor will not have to bear the costs of carrying out such tests.
Engineer's 36.5 Determination where Tests not Provided for
Where, pursuant to Sub-Clause 36.4, this Sub-Clause applies the Engineer shall, after due consultation with the Employer and the Contractor, determine: .
(a) any extension of time to which the Contractor is
entitled under Clause 44, and
(b) the amount of such costs, which shall be added to the Contract Price, and shall notfy the Contractor accordingly, with a copy to the Employer.
This Sub-Clause enables the Engineer, after consultation with the Employer and the Contractor, to determine to what additional cost and extension of time the Contractor shall be entitled in respect of tests additional to those specified in the Contract.
Inspection of 37.1 Operations
The Engineer, and any person authorised by him, shall
at all reasonable times have access to the Site and to
all workshops and places where materials or Plant are
being manufactured, fabricated or prepared for the
Works and the Contractor shall afford every facility for
and every assistance in obtaining the right to such access. Sub-Clause 37.1 is included to ensure that persons carrying out inspection of the Works are properly authorised to do so. Control is necessary on those who visit the Site both for reasons of safety and to avoid any unnecessary disruption of progress of the Works.
Authorised persons for the purpose of this Sub-Clause may be the Engineer, the Engineer's Representative, any assistant appointed under Sub-Clause 2.4 or any person authorised by the Engineer. The latter would include representatives of the Employer. © FIDIC 1989
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Inspection 37.2
and Testing
The Engineer shall be entitled, during manufacture,fab-
rication or preparation to inspect and test the materials and Plant to be supplied under the Contract. If materi-
als or Plant are being manufactured, fabricated or prepared in workshops or places other than those of the Contractor, the Contractor shall obtain permission for the Engineer to carry out such inspection and testing in those workshops or places. Such inspection or testing
shall not release the Contractor from any obligation under the Contract.
This Sub-Clause provides for inspection and testing, by authorised persons, of materials and Plant which are to be components of the Works. Such inspection and testing may take place in the Contractor's premises on or off the Site, or in any other premises. It is this Sub-Clause that authorises inspection and testing of Plant being manufactured in countries other than that of the Contractor or the country where the Works are being executed.
Dates for 37.3 Inspection
and Testing
The Contractor shall agree with the Engineer on the time and materials
place for the inspection or testing of any or Plant as provided in the Contract. The Engineer shall give the Contractor not less than 24 hours notice of his intention to carry out the inspection or to attend the tests. If the Engineer, or his duly au-
thorised representative, does not attend on the date
agreed, the Contractor may, unless otherwise instructed by the Engineer, proceed with the tests, which shall be deemed to have been made in the presence of the Engi-
neer. The Contractor shall forthwith forward to the Engineer duly certified copies of the test readings. If the Engineer has not attended the tests, he shall accept the
said readings as accurate. Arrangements will have to be made for times and dates of tests and it is necessary that having made such arrangements they are adhered to unless alternative arrangements are agreed between the Contractor and the Engineer. Sub-Clause 37.3 states the procedure in the event that the Engineer is not represented at any pre-arranged test.
Rejection 37.4
If, at the time and place agreed in accordance with Sub-
Clause 37.3, the materials or Plant are not ready for inspection or testing or if, as a result of the inspection or testing referred to in this Clause, the Engineer determines that the materials or Plant are defective or oth-
erwise not in accordance with the Contract, he may reject the materials or Plant and shall notify the Contractor thereof immediately. The notice shall state the Engineer's objections with reasons. The Contractor shall then promptly make good the defect or ensure that rejected materials or Plant comply with the Contract. If 92
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the Engineer so requests, the tests of rejected materials
or Plant shall be made or repeated under the same
terms and conditions. All costs incurred by the Employer
by the repetition of the tests shall, after due consultation with the Employer and the Contractor, be determined by the Engineer and shall be recoverable from the Contractor by the Employer and may be deducted from any monies due or to become due to the Contractor and
the Engineer shall notify the Contractor accordingly, with a copy to the Employer. The previous Sub-Clause dealt with non-attendance by the Engineer. This Sub-Clause deals with the situation where the Contractor is not ready on the pre-arranged date. The Sub-Clause also deals with the consequences of unsatisfactory test results.
Independent 37.5 Inspection
The
Engineer may delegate inspection and testing of
materials or Plant to an independent inspector. Any
such delegation shall be effected in accordance with Sub-Clause 2.4 and for this purpose such independent inspector shall be considered as an assistant of the Engineer. Notice of such appointment (not being less than 14 days) shall be given by the Engineer to the Contractor.
This Sub-Clause should be read in conjunction with Sub-Clause 37.2 and will usually apply when the tests are to be carried out on materials or Plant being supplied from a third country.
Examination 38.1
of Work
before Covering up
No part of the Works shall be covered up or put out of view without the approval of the Engineer and the Contractor shall afford full opportunity for the Engineer
to examine and measure any such part of the Works which is about to be covered up or put out of view and to examine foundations before any part of the Works is placed thereon. The Contractor shall give notice to the Engineer whenever any such part of the Works orfoundations is or are ready or about to be ready for examination and the Engineer shall, without unreasonable delay, unless he considers it unnecessary and advises the Contractor accordingly, attend for the purpose of examining and measuring such part of the Works or of examining such foundations.
Arrangements must exist for the Engineer to inspect work which is to be covered up. This Sub-Clause stipulates that work shall not be covered up before the Engineer has had an opportunity to examine and measure it, and the Contractor has the obligation to call upon the Engineer for that purpose. The Contractor should not be unreasonably delayed in proceeding with his work because of delay by the Engineer in carrying out this task and the Engineer is obliged by the Conditions to attend without undue delay. ©FIDIC 1989
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Uncovering 38.2
and Making
The Contractor shall uncover any part of the Works or make openings in or through the same as the Engineer
may from time to time instruct and shall reinstate and
Openings
make good such part. If any such part has been covered up or put out of view after compliance with the requirement of Sub-Clause 38.1 and is found to be executed in accordance with the Contract, the Engineer shall, after due consultation with the Employer and the Contractor,
determine the amount of the Contractor's costs in respect of such of uncovering, making openings in or through, reinstating and making good the same, which shall be added to the Contract Price, and shall notify the Contractor accordingly, with a copy to the Employer. In any other case all costs shall be borne by the Contractor. The Engineer may require, as a consequence of later discovery, that work already covered up be uncovered and inspected and tested. Sub-Clause 38.2 specifies under what circumstances payment will be made to the Contractor for extra work which this opening up has incurred.
Removal of 39.1 Improper Work, Materials or Plant
The Engineer shall have authority to issue instructions
from time to time, for: .
.
(a) the removal from the Site, within such time or times
as may be specified in the instruction, of any materials or Plant which, in the opinion of the Engineer, are not in accordance with the Contract.
(b) the substitution of proper and suitable materials or Plant, and (c) the removal and proper re-execution, notwithstanding any previous test thereof or interim payment therefor, of any work which, in respect of (i)
materials, Plant or workmanship, or
(ii) design by the Contractor or for which he is respon sible, is not, in the opinion of the Engineer, in accordance with the Contract.
The Contractor is required to remove faulty materials, Plant and work and to replace the same at his own cost. The Engineer, in giving his instructions, would be wise to rely on tests or other objective criteria, as well as to specify a reasonable time for the Contractor to act, as sanctions are provided under Sub-Clause 39.2 if the Contractor does not act within the time specified by the Engineer or, if no time is specified, within a reasonable time.
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As far as case (c) of Sub-Clause 39.1 is concerned, the situation in practice will be more complex. Generally, the failure of any work to meet the requirements of the Contract,
whether in terms of materials, Plant or workmanship, or whether in terms of design provided by the Contractor, will have been disclosed in tests, e.g., a faulty casting, insufficient packing of layers in an earth dam, a deflection of a precast beam. In such cases removal will be a minor impediment, and would have been provided for to a certain extent in the programme. On the other hand, when tests have shown no failure, interim payment has been made and work has proceeded normally, and only at a later stage is it realised that the work fails to meet the requirements of the Contract, bearing in mind the provisions of Sub-Clause 2.1(c), the Engineer should investigate with the parties to the Contract whether an acceptable solution can be found on the basis of redesign and
adjustment of payment. The instructions to remove the faulty work should, in such case, be an exceptional remedy and, again, the Engineer should specify a reasonable time for the Contractor to act.
Default of 39,2 Contractor in Compliance
In case of default on the part of the Contractor in carrying out such instruction within the time specified therein or, if none, within a reasonable time, the Em-
ployer shall be entitled to employ and pay other persons to carry out the same and all costs consequent thereon or incidental thereto shall, after due consultation with the Employer and the Contractor, be determined by the Engineer and shall be recoverable from the Contractor by the Employer, and may be deducted by the Employer from any monies due or to become due to the Contractor and the Engineer shall notify the Contractor accordingly, with a copy to the Employer.
The sanction contained in this Sub-Clause is included to protect the Employer in case the Contractor refuses to comply with an instruction of the Engineer under Sub-Clause 39.1.
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SUSPENSION
Suspension 40.1 of Work
The Contractor shall, on the instructions of the Engineer, suspend the progress of the Works or any part
thereof for such time and in such manner as the Engi-
neer may consider necessary and shall, during such suspension, properly protect and secure the Works or such part thereof so far as is necessary in the opinion of the Engineer. Unless such suspension is (a) otherwise provided for in the Contract, or (b) necessary by reason of some default of or breach of contract by the Contractor or for which he is responsible, or
(c) necessary by reason of climatic conditions on the Site, or (d) necessary for the proper execution of the Works or for the safety of the Works or any part thereof (save to
the extent that such necessity arises from any act or
default by the Engineer or the Employer or from any of the risks defined in Sub-Clause 20.4),
Sub-Clause 40.2 shall apply. This Sub-Clause describes the Engineer's authority to suspend the progress of the Works
and indicates the circumstances in which the Contractor will be considered responsible for the suspension.
For a Contract comprising dredging and some types of reclamation work the Sub-Clause may be varied in Part II as follows:
Suspension
40.1
of Work
Engineer's 40.2 Determination following
Suspension
Delete paragraph (c) and renumber paragraph (d) as (c).
Where, pursuant to Sub-Clause 40.1, this Sub-Clause applies the Engineer shall, after due consultation with the Employer and the Contractor, determine
(a) any extension of time to which the Contractor is
entitled under Clause 44, and
(b) the amount, which shall be added to the Contract Price, in respect of the cost incurred by the Contractor by reason of such suspension, and shall notify the Contractor accordingly, with a copy to the Employer.
This Sub-Clause authorises the Engineer, after consultation with the Employer and the Contractor, to determine what extension of time and/or extra costs the Contractor shall be entitled to receive if he is not responsible for the suspension.
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Suspension 40.3 lasting more
than 84 days
If the progress of the Works or any part thereof is suspended on the written instructions of the Engineer and if permission to resume work is not given by the Engineer within a period of 84 days from the date of suspension then, unless such suspension is within paragraph
(a), (b), (c) or (d) of Sub-Clause 40.1, the Contractor may give notice to the Engineer requiring permission, within 28 days from the receipt thereof, to proceed with the Works or that part thereof in regard to which pro gress is suspended. If, within the said time, such permission is not granted, the Contractor may, but is not bound
to, elect to treat the suspension, where it affects part only of the Works, as an omission of such part under Clause 51 by giving a further notice to the Engineer to that effect, or, where it affects the whole of the Works, treat the suspension as an event of default by the Employer and terminate his employment under the Contract in accordance with the provisions of Sub-Clause 69.1, whereupon the provisions of Sub-Clauses 69.2 and 69.3 shall apply.
This Sub-Clause provides that if the progress of the Works or any part thereof is suspended for 84 days then, unless the Contractor is responsible for the suspension, the Contractor may, by notice to the Engineer, require permission, within 28 days, to proceed. If such permission is not granted, the Contractor may elect to treat the suspended work as omitted or, where all work has been suspended, treat the Contract as repudiated.
For a Contract comprising dredging and some types of reclamation work this SubClause may be varied in Part II as follows:
Suspension 40.3 lasting more than 84 days
In the first sentence delete the words ",(c) or (d)" and substitute "or (c)".
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COMMENCEMENT AND DELAYS
Commencement 41.1 of Works
The Contractor shall commence the Works as soon as is reasonably possible after the receipt by him of a
notice to this effect from the Engineer, which notice
shall be issued within the time stated in the Appendix to Tender after the date of the Letter of Acceptance. Thereafter, the Contractor shall proceed with the Works with the due expedition and without delay.
The Appendix to Tender specifies a time period after the date of the Letter of Acceptance within which the Engineer is to send to the Contractor a notice to commence. This notice should be sent, against receipt, to the Contractor's principal place of business (see Clause 68). Under Sub-Clause 41.1 the Contractor undertakes to commence the Works as soon as is reasonably possible after the date upon which he receives this notice. This date is the Commencement Date defined in Sub-Clause 1.1(c) (i), and the Time for Completion is calculated from the Commencement Date (see Sub-Clause 43.1). The wording of Sub-Clause 41.1 is consistent with paragraph 3 of the form of Tender. The time limit for sending the notice to commence is important as the Contractor may have prior commitments from Subcontractors, suppliers or others, who may request price increases if orders cannot be executed promptly. Moreover, before such notice is sent the Employer must be in possession of the Site and have clear access to it, as well as having other legal and financial formalities completed in accordance with an established programme. It is particularly important that the Employer is able to comply with any obligation to make advance payments to the Contractor. It is helpful for the Engineer to give his client advice on such matters. When, for a particular project, the Employer has to comply with certain legal or administrative procedures e.g. ratification of the Contract by a political body or the approval of a Board, the allocation of a budget (which may affect subsequent budget periods), the provision of import licences before the Contract is validly established or before the notice to commence can be given, this should be stated in the tender documents.
Any additional Sub-Clauses relating to commencement should be added in Part II. Sub-Clause 41.1 should be read in conjunction with Clauses 26 and 42.
Possession of 42.1
Site and Access Thereto
Save
insofar as the Contract may prescribe:
(a) the extent of portions of the Site of which the Con-
tractor is to be given possession from time to time, and
(b) the order in which such portions shall be made available to the Contractor and subject to any requirement in the Contract as to the order in which the Works shall be executed, the Employer will, with the Engineer's notice to commence the Works, give to the Contractor possession of
(c) so much of the Site, and
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(d) such access as, in accordance with the Contract, is to be provided by the Employer
as may be required to enable the Contractor to commence and proceed with the execution of the Works in accordance with the programme referred to in Clause 14, if any, and otherwise in accordance with such reasonable proposals as the Contractor shall, by notice to the Engineer with a copy to the Employer, make. The Employer will, from time to time as the Works proceed, give to the Contractor possession of such further portions of the Site as may be required to enable the Contractor to proceed with the execution of the Works with
due dispatch in accordance with such programme or proposals, as the case may be. The Contractor is given possession of the Site only for the purpose of carrying out the Works, and his occupation of the Site is subject to the terms of the Contract.
Failure to 42.2 Give
Possesion
If the Contractor suffers delay and/or incurs costs from failure on the part of the Employer to give possession in accordance with the terms of Sub-Clause 42.1, the Engineer shall, after due consultation with the Employer and the Contractor, determine:
(a) any extension of time to which the Contractor is entitled under Clause 44, and (b) the amount of such costs, which shall be added to the Contract Price, and shall notify the Contractor accordingly, with a copy to the Employer. The Employer must give the Contractor possession of the Site (or portions thereof where appropriate) at the same time as the Engineer gives the notice to commence the Works pursuant to Clause 41. Delay may result in deferral of the date when the Works reach substantial completion and also in extra cost to the Employer.
Wayleaves and 42.3 Facilities
The
Contractor shall bear all costs and charges for
special or temporary wayleaves required by him in con-
nection with access to the Site. The Contractor shall also provide at his own cost any additional facilities outside the Site required by him for the purposes of the Works.
If the Contractor requires any special arrangements, e.g. for transporting exceptionally heavy equipment, the Contractor shall bear all costs and charges related thereto.
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Time for 43.1 Completion
The whole of the Works and, if applicable, any Section
required to be completed within a particular time as
stated in the Appendix to Tender, shall be completed, in accordance with the provisions of Clause 4, within the time stated in the Appendix to Tender for the whole of
the Works or the Section (as the case may be), calculated from the Commencement Date, or such extended time as may be allowed under Clause 44. This Sub-Clause links Time for Completion with Taking Over under Clause 48. It should be read in conjunction with the form of Tender, the Appendix to Tender and with Clause 47 which deals with liquidated damages and bonuses, if any.
Attention is particularly drawn to the possible need for defining Sections of the Works, see Sub-Clause 1.1 .(f)(vi) and for drafting corresponding provisions for completion and liquidated damages and bonuses (if any), in the Appendix to Tender.
Where completion is stated to be by a date and not within a period of time, this SubClause will need to be varied in Part II. The following is an example of appropriate wording:
Time for 43.1 Completion
Delete the words "within the time...such extended time" and substitute "by the date or dates stated in the Appendix to Tender for the whole of the Works or the
Section (as the case may be) or such later date or dates".
Extension of 44.1 Completion
In the event of (a) the amount or nature of extra or additional work, or
(b) any cause of delay referred to in these Conditions,
or
(c) exceptionally adverse climatic conditions, or
(d) any delay, impediment or prevention by the Employer, or (e) other special circumstances which may occur, other than through a default of or breach of contract by the Contractor or for which he is responsible,
being such as fairly to entitle the Contractor to an extension of the Time for Completion of the Works, or any
Section or part thereof, the Engineer shall, after due
consultation with the Employer and the Contractor, determine the amount of such extension and shall notify
the Contractor accordingly, with a copy to the Employer. The granting of an extension of time, to which the Contractor may become entitled, might arise from such factors as delay in obtaining possession of the Site (Clause 42), delay
in the issue of drawings or instructions (Clause 6), adverse physical obstructions or conditions (Clause 12), suspensions (Clause 40), extra work (Clause 51) or damage or delays to the Works (Clauses 20 and 65). 100
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As liquidated damages and bonuses (if any) are affected, it is important that, whenever an extension of time is granted, a new completion date is clearly established to supersede the completion date established in accordance with Clause 43. Although the granting of an extension of time does not necessarily entail extra cost to the Employer, the effects of delay may entitle the Contractor to extra payment - see for example Sub- Clauses 6.4 and 42.2. The granting of an extension of time is based on the Engineer's interpretation of the
Contract and his assessment of the circumstances involved during the execution of the Works and the basis for the claim stated by the Contractor in his notification. It should be noted that the Engineer makes his determination after consultation with the Employer and the Contractor.
Contractor to 44.2 Provide Notification
Provided that the Engineer is not bound to make any determination unless the Contractor has
(a) within 28 days after such event has first arisen notified the Engineer with a copy to the Employer, and
and Detailed
Particulars
(b) within 28 days, or such other reasonable time as may be agreed by the Engineer, after such not ifi cation
submitted to the Engineer detailed particulars of any extension of time to which he may consider himself entitled in order that such submission may be investigated at the time. It is important that the events which may give rise to an entitlement to an extension are dealt with as and when they occur and can be identified and investigated. The requirement of notification and the submission of particulars has therefore been expanded in the fourth edition. This requirement further underlines the necessity of good communication and understanding between the Employer, the Engineer and the Contractor, as well as the importance of the Engineer's role in acting in an impartial and unbiased manner as required by Sub-Clause 2.6 of these Conditions.
Interim Determination of Extension
4.3
Provided also that where an event has a continuing effect such that it is not practicable for the Contractor to submit detailed particulars within the period of 28
days referred to in Sub-Clause 44.2(b), he shall nevertheless be entitled to an extension of time provided that he has submitted to the Engineer interim particulars at intervals of not more than 28 days and final particulars within 28 days of the end of the effects resulting from the event. On receipt of such interim particulars, the Engineer shall, without undue delay, make an interim determination of extension of time and, on receipt of the final particulars, the Engineer shall review all the circumstances and shall determine an overall extension of
time in regard to the event. In both such cases the
Engineer shall make his determination after due consultation with the Employer and the Contractor and shall
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notify the Contractor of the determination, with a copy to the Employer. No final review shall result in a decrease of any extension of time already determined by the Engineer. Events entitling a Contractor to an extension of time may be continuing, in which case detailed particulars can only be established during a longer period than is envisaged in Sub-Clause 44.2. Sub-Clause 44.3 provides for the submission of interim particulars at intervals. This implies that contemporary records will be available when the claim is eventually finalised.
Restriction 45.1 on Working Hours
Subject to any provision to the contrary contained in the Contract, none of the Works shall, save as hereinafter provided, be carried on during the night or on locally
recognised days of rest without the consent of the Engi-
neer, except when work is unavoidable or absolutely necessary for the saving of life or property or for the safety of the Works, in which case the Contractor shall immediately advise the Engineer. Provided that the provisions of this Clause shall not be applicable in the case of any work which it is customary to carry out by multiple shifts.
This Sub-Clause stipulates that the Contractor will ordinarily plan to execute the Works during normal working hours at the Site. It recognises, however, that some work will have to go on more or less continuously, when it is unavoidable or when required for safety reasons or custom, e.g. construction of a cofferdam during a critical period, drainage and dewatering, underground excavation work, maintenance and repair of Contrac-
tor's Equipment. This Sub-Clause should be read in conjunction with the Contractor's obligation to avoid nuisance in accordance with Clause 19. The Contractor is required to obtain the Engineer's consent to work other than during normal working hours (Clause 46).
For a Contract located in an area, where environmental restrictions do not apply, or
where a Contract comprises work such as dredging and reclamation that may
require continuous working, the Clause may need to be varied in Part II as follows:
Working 45.1
Hours
Delete Sub-Clause 45.1 and substitute: Subject to any provision to the contrary contained in the
Contract, the Contractor shall have the option to work continuously by day and by night and on locally recognised days of rest. The Contractor's option may be further extended by substituting, in place of the last three words in the above example Sub-clause:
holidays or days of rest.
Rate of 46.1 Progress
any reason, which does not entitle the Contractor Iffor an extension of time, the rate of progress of the Works to
or any Section is at any time, in the opinion of the Engineer, too slow to comply with the Time for Completion, the Engineer shall so notify the Contractor who shall thereupon take such steps as are necessary, subject to the consent of the Engineer, tc expedite progress
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so as to comply with the Time for Completion. The Contractor shall not be entitled to any additional payment for taking such steps. If, as a result of any notice given by the Engineer under this Clause, the Contractor considers that it is necessary to do any work at night or on locally recognised days of rest, he shall be entitled to seek the consent of the Engineer so to do. Provided that if any steps, taken by the Contractor in meeting his obligations under this Clause, involve the Employer in additional supervision costs, such costs shall, after due consultation with the Employer and the Contractor, be determined by the Engineer and shall be recoverable from the Contractor by the Employer, and may be de-
ducted by the Employer from any monies due or to become due to the Contractor and the Engineer shall notify the Contractor accordingly, with a copy to the Employer.
This Sub-Clause deals with the case where the Contractor is not maintaining progress adequately to achieve timely completion and is not entitled to an extension of time. Notice under this Sub-Clause is generally a prerequisite to invoking Sub-Clause 63.1 (d). Provision is also made in Sub-Clause 46.1 that any additional supervision costs incurred by the Employer due to steps taken by the Contractor to expedite progress pursuant to a notification by the Engineer may be recovered by the Employer from the Contractor.
Liquidated 47.1 Damages for Delay
If the Contractor fails to comply with the Time for Com-
pletion in accordance with Clause 48, for the whole of the Works or, if applicable, any Section within the relevant time prescribed by Clause 43, then the Contractor shall pay to the Employer the relevant sum stated in the
Appendix to Tender as liquidated damages for such
default and not as a penalty (which sum shall be the only
monies due from the Contractor for such default) for every day or part of a day which shall elapse between the relevant Time for Completion and the date stated in a Taking-Over Certificate of the whole of the Works or
the relevant Section, subject to the applicable limit stated in the Appendix to Tender. The Employer may,
without prejudice to any other method of recovery, deduct the amount of such damages from any monies due or to become due to the Contractor. The payment or deduction of such damages shall not relieve the Contractor from his obligation to complete the Works, or from any other of his obligations and liabilities under the Contract.
The amount of liquidated damages is determined by the Employer, before tenders are invited, as a reasonable assessment of the actual damages which he would suffer in the event of delay in completion of the Works. Tenderers are, therefore, aware of the nature of their commitment at the time of tendering but it is important to specify a limit on the total liquidated damages which can become due. Should liquidated damages become due, deduction is made by the Employer, as provided for in Sub-Clause 47.1. © FIDIC 1989
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Reduction of 47.2 Liquidated Damages
If, before the Time for Completion of the whole of the Works or, if applicable, any Section, a Taking-Over
Certificate has been issued for any part of the Works or
of a Section, the liquidated damages for delay in completion of the remainder of the Works or of that Section
shall, for any period of delay after the date stated in such Taking-Over Certificate, and in the absence of alternative provisions in the Contract, be reduced in the proportion which the value of the part so certified bears to the value of the whole of the Works or Section, as applicable. The provisions of this Sub-Clause shall only
apply to the rate of liquidated damages and shall not affect the limit thereof.
If delay in completion does not affect the whole of the Works, arrangements for a prorata reduction are set out in Sub-Clause 47.2. If it is considered by the Employer that a pro-rata reduction would not be equitable, alternative provisions should be included in Part II.
If the Employer can make use of the Works on early completion (that is to say if performance under other contracts would not prevent their use) and can adapt his financing to the circumstances, the Employer may consider making provision for a bonus to be
paid to the Contractor in case of early completion. The bonus could be related to completion of the whole of the Works or to any part thereof, e.g. the first generating unit in a power station.
In the case where a bonus is to be provided for early completion of the whole of the Works the following example Sub-Clause can be added in Part II:
Bonus for 47.3
If the Contractor achieves completion of the Works prior to the time prescribed by Clause 43, the Employer shall pay to the Contractor a sum (insert figure) for every day which shall elapse between the date stated in the Taking-Over Certificate in respect of the Works issued in accordance with Clause 48 and the time prescribed in Clause 43.
Completion
In the case where bonuses are provided for early completion of Sections of the Works and details, other than dates, are given in the Specification, the following Sub-Clause can be considered for addition in Part II:
Bonus for 47.3 Completion
Sections are required to be completed by the dates given
in the Appendix to Tender in order that such Sections may be occupied and used by the Employer in advance of the completion of the whole of the Works. Details of the work required to be executed to entitle the
Contractor to bonus payments and the amounts of the bonuses are stated in the Specification.
For the purposes of calculating bonus payments, the dates given in the Appendix to Tender for completion of Sections are fixed and, unless otherwise agreed, no adjustments of the dates by reason of granting an exten-
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sion of time pursuant to Clause 44 or any other Clause of these Conditions will be allowed.
Issue of certificates by the Engineer that the Sections were satisfactory and complete by the dates given on the certificates shall, subject to Clause 60, entitle the Contractor to the bonus payments calculated in accordance with the Specification.
Taking-Over 48.1 Certificate
When the whole of the Works have been substantially completed and have satisfactorily passed any Tests on
Completion prescribed by the Contract, the Contractor may give notice to that effect to the Engineer, with a copy to the Employer, accompanied by a written undertaking to finish with due expedition any outstanding work during the Defects Liability Period. Such notice and undertaking shall be deemed to be a request by the
Contractor for the Engineer to issue a Taking-Over Certificate in respect of the Works. The Engineer shall, within 21 days of the date of delivery of such notice, either issue to the Contractor, with a copy to the Employer, a Taking-Over Certificate, stating the date on
which, in his opinion, the Works were substantially completed in accordance with the Contract, or give instructions in writing to the Contractor specifying all the work which, in the Engineer's opinion, is required to be done by the Contractor before the issue of such Certificate. The Engineer shall also notify the Contractor of any defects in the Works affecting substantial completion that may appear after such instructions and before completion of the Works specified therein. The Contractor shall be entitled to receive such Taking-Over Certificate within 21 days of completion, to the satisfaction of the Engineer, of the Works so specified and remedying any defects so notified.
This Sub-Clause sets out the procedural steps for the issue of a certificate when the Works have been substantially completed. The question is frequently posed, 'What is
substantial completion?' It is rarely the case that when application is made for the TakingOver Certificate there is no outstanding work at all to be completed by the Contractor.
Generally speaking the Works are substantially completed when they are in such a condition that they are capable of being occupied and used by the Employer for the purpose for which they are intended, although there are minor tasks to be completed by the Contractor. Substantial completion can only be achieved after the Works have satisfactorily passed the Tests on Completion (if any).
The Contractor generally takes the initiative in asking for a Taking-Over Certificate for the whole of the Works. The Certificate is issued by the Engineer provided that the extent of any outstanding work is of a minor character and the Works are capable of being used for the purposes for which they were intended and if the Contractor has given a written undertaking to finish with due expedition any such outstanding work during the Defects Liability Period. © FIDIC 1989
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The Taking-Over Certificate will confirm that the work has been substantially completed, and will include a list of outstanding items (if any) to be completed during the Defects Liability Period. The Certificate will also establish the date on which substantial completion was achieved and the Works were taken over by the Employer and the Defects Liability Period in respect thereof began. In accordance with Sub-Clause 20.1 the respon-
sibility for the care of the Works passes to the Employer on the date of issue of the Taking-Over Certificate. The Employer should prepare in good time for taking over reponsibility for the Works and arrange insurance if he wishes to do so. It should be noted that, other than in Sub-Clause 62.1 which refers to completion of the Contract, all other clauses refer to completion of the Works in terms of Clause 48.
Taking Over 48.2 of Sections or Parts
Similarly, in accordance with the procedure set out in
48.1, the Contractor may request and the Engineer shall issue a Taking-Over Certificate in respect of: Sub-Clause
(a) any Section in respect of which a separate Time for Completion is provided in the Appendix to Tender, or (b) any substantial part of the Permanent Works which has been both completed to the satisfaction of the Engi-
neer and, otherwise than as provided for in the Contract, occupied or used by the Employer, or (c) any part of the Permanent Works which the Employer has elected to occupy or use prior to completion (where such prior occupation or use is not provided for in the Contract or has not been agreed by the Contractor as a temporary measure). The Appendix to Tender may specify different completion dates for various Sections of the Works and in this event the Contractor may apply for a Taking-Over Certificate for a completed Section or Sections. Similarly, the Contractor may apply for a Taking-Over Certificate for a substantial part of the Permanent Works which have been completed and occupied or used by the Employer. The provisions for the issue of a Taking-Over Certificate will apply to a Section or part in the same way as to the whole of the Works in Sub-Clause 48.1.
If the Employer should elect to take over or use a part of the Works prior to completion similar arrangements apply.
Substantial 48.3
Cornpletion of Parts
If any part of the Permanent Works has been substan-
tially completed and has satisfactorily passed any Tests on Completion prescribed by the Contract, the Engineer may issue a Taking-Over Certificate in respect of that part of the Permanent Works before the completion of
the whole of the Works and, upon the issue of such Certificate, the Contractor shall be deemed to have undertaken to complete with due expedition any outstanding work in that part of the Permanent Works during the Defects Liability Period.
As stated in the commentary to Sub-Clause 48.1, the Contractor generally takes the initiative in asking for a Taking-Over Certificate. Alternatively Sub-Clause 48.3 allows 106
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the Engineer to initiate action if the extent of outstanding work is of a minor character and does not prevent the Employer from taking occupation and using the part of the Works for its intended purpose. The Certificate is issued by the Engineer and in such case the Contractor is deemed to have given a written undertaking to finish with due expedition any outstanding work during the Defects Liability Period.
Surfaces 484 Provided that a Taking-Over Certificate given in respect of any Section or part of the Permanent Works before completion of the whole of the Works shall not be
Requiring Reinstatement
deemed to certify completion of any ground or surfaces requiring reinstatement, unless such Taking-Over Certificate shall expressly so state.
If it becomes apparent that any ground or surface requires reinstatement the fact that this was not stipulated in the Taking-Over Certificate will not relieve the Contractor of his responsibility to carry out such reinstatement at his own cost. Sub-Clause 48.1 presupposes that the Works will normally have satisfactorily passed the Tests on Completion (if any), when the Contractor makes his request, and the Engineer issues the Taking-Over Certificate. Circumstances outside the control of the Contractor may prevent the Tests on Completion from being performed. The following proposed Sub-Clause 48.5 sets out a procedure to deal with such a case and it may be introduced into the Contract if it is foreseen that such event may occur:
Prevention 48.5 from Testing
If the Contractor is prevented from carrying out the Tests on Completion by a cause for which the Employer
or the Engineer or other contractors employed by the Employer are responsible, the Employer shall have been deemed to have taken over the Works on the date when the Tests on Completion would have been completed but for such prevention. The Engineer shall issue a TakingOver Certificate accordingly. Provided always that the
Works shall not be deemed to have been taken over if they are not substantially in accordance with the Contract.
If the Works are taken over under this Sub-Clause the Contractor shall nevertheless carry out the Tests on Completion during the Defects Liability Period. The Engineer shall require the Tests to be carried out by giving 14 days notice to the Contractor. Any additional cost to which the Contractor may be put, in making the Tests on Completion during the Defects Liability Period, shall be added to the Contract Price.
Other circumstances outside the control of both the Employer and the Contractor may occur preventing the Tests on Completion from being performed e.g., the water level in a reservoir being so low as to prevent the testing of hydraulic equipment such as gates. If such circumstances are foreseen, the first pragraph of the above example Sub-Clause must be modified appropriately. © FIDIC 1989
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DEFECTS LIABILITY
Defects 49.1 Liability Period
In these Conditions the expression "Defects Liability Period" shall mean the defects liability period named in the Appendix to Tender, calculated from: (a) the date of completion of the Works certified by the Engineer in accordance with Clause 48, or (b) in the event of more than one certificate having been issued by the Engineer under Clause 48, the respective dates so certified
and in relation to the Defects Liability Period the expression "the Works" shall be construed accordingly. This Sub-Clause defines the Defects Liability Period. The Defects Liability Period is usually for a period of one year but on certain projects may exceptionally be for a period
of two years or even more. The length of the Defects Liability Period will be inserted in the Appendix to Tender. There may be a number of Defects Liability Periods each tied to a Section or part of the Works and linked to a Taking-Over Certificate (Clause 48).
The main purpose of the Defects Liability Period (which in previous editions was referred to as the Maintenance Period) is to demonstrate under operational conditions that the requirements of the Contract have been complied with. During this period the Contractor must not only complete such outstanding items of work as are listed in the Taking-
Over Certificate but also remedy any defects which appear. The Contract does not obligate the Contractor to perform operational maintenance during the Defects Liability Period, unless it is specifically included as part of the Works with an item in the Bill of Quantities and a corresponding paragraph in the Specification, or otherwise made obvious in the tender documents.
Completion 49.2 Outstanding Work and Remedying Defects
To
the intent that the Works shall, at or as soon as
practicable after the expiration of the Defects Liability Period, be delivered to the Employer in the condition required by the Contract, fair wear and tear excepted, to the satisfaction of the Engineer, the Contractor shall:
(a) complete the work, if any, outstanding on the date stated in the Taking-Over Certificate as soon as practicable after such date and (b) execute all such work of amendment, reconstruction, and remedying defects, shrinkages or other faults as the
Engineer may, during the Defects Liability Period or within 14 days after its expiration, as a result of an inspection made by or on behalf of the Engineer prior to its expiration, instruct the Contractor to execute.
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This Sub-Clause stipulates that, at the end of the Defects Liability Period, the Works must be ready for final delivery 'in the condition required by the Contract, fair wear and tear excepted'. Minor items may still be outstanding and the Sub-Clause allows a further 14 days for the Engineer to issue instructions to the the Contractor to complete items recorded prior to the expiration of the period.
Cost of 49.3
All work referred to in Sub-Clause 49.2 (b) shall be executed by the Contractor at his own cost if the neces-
Remedying Defects
shy thereof is, in the opinion of the Engineer, due to:
(a) the use of materials, Plant or workmanship not in accordance with the Contract, or (b) where the Contractor is responsible for the design of part of the Permanent Works, any fault in such design, or
(c) the neglect or failure on the part of the Contractor to comply with any obligation, expressed or implied, on
the Contractor's part under the Contract.
If, in the opinion of the Engineer, such necessity is due to any other cause, he shall determine an addition to the Contract Price in accordance with Clause 52 and shall notify the Contractor accordingly, with a copy to the Employer.
Sub-Clause 49.3 sets out the defects which must be remedied by the Contractor at his
own cost. It also states the procedure to be followed where the remedying of the defect(s) is not at the cost of the Contractor.
Contractor's 494 Failure to
In case of default on the part of the Contractor in carrying out such instruction within a reasonable time, the
Instructions
persons to carry out the same and if such work is work
Carry Out
Employer shall be entitled to employ and pay other
which, in the opinion of the Engineer, the Contractor was liable to do at his own cost under the Contract, then all costs consequent thereon or incidental thereto shall, after due consultation with the Employer and the Con-
tractor, be determined by the Engineer and shall be
recoverable from the Contractor by the Employer, and may be deducted by the Employer from any monies due to become due to the Contractor and the Engineer shall notify the Contractor accordingly, with a copy to the Employer.
If the Contractor fails to carry out the instructions of the Engineer to remedy defects which are to be at the cost of the Contractor, the Employer is entitled to arrange for them to be carried out at the Contractor's cost. ©FIDIC 1989
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There are two cases referred to which may require an additional sub-clause in Part II. The first may be necessary for a Contract which includes a high proportion of Plant:
Extension 49.5 of Defects Liability
The provisions of this Sub-Clause shall apply to all replacements or renewals of Plant carried out by the Contractor to remedy defects and damage as if the replacements and renewals had been taken over on the date they were completed. The Defects Liability Period for the Works shall be extended by a period equal to the period during which the Works cannot be used by reason of a defect or damage. If only part of the Works is affected the Defects Liability Period shall be extended
only for that part. In neither case shall the Defects
Liability Period extend beyond 2 years from the date of taking over.
When progress in respect of Plant has been suspended under Clause 40, the Contractor's obligations under this Clause shall not apply to any defects occurring more than 3 years after the Time for Completion established on the date of the Letter of Acceptance. The second may be necessary for a Contract comprising dredging work:
No Remedying 49.5 of Defects in
Not withstanding Sub-Clause 49.2, the Contractor shall
Contractor 50.1 to Search
If any defect, shrinkage or other fault in the Works
Dredging Work after Completion
have no responsibility for the remedying of defects, shrinkages or other faults in respect of dredging work after the date stated in the Taking-Over Certificate.
appears
at any time prior to the end of the Defects
Liability Period, the Engineer may instruct the Contrac-
tor, with copy to the Employer, to search under the directions of the Engineer for the cause thereof. Unless such defect, shrinkage or other fault is one for which the
Contractor is liable under the Contract, the Engineer shall, after due consultation with the Employer and the Contractor, determine the amount in respect of the costs of such search incurred by the Contractor, which shall be added to the Contract Price and shall notify the Contractor accordingly, with a copy to the Employer. If such
defect, shrinkage or other fault is one for which the Contractor is liable, the cost of the work carried out in searching as aforesaid shall be borne by the Contractor and he shall in such case remedy such defect, shrinkage or other fault at his own cost in accordance with the provisions of Clause 49.
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It is an obligation of the Contractor, if required by the Engineer, to search for the cause of any defect, shrinkage or other fault in the Works, both during the execution of the Works and after their completion until the end of the Defects Liability Period.
Whereas during the execution of the Works the Contractor shall do such searching at his own cost unless the cause is one for which the Employer is responsible, during the Defects Liability Period the searching shall be paid for by the Employer unless the Contractor is liable for such fault due to the use of faulty materials, Plant or workmanship or through other breach of contract. As dredging work is carried out under special circumstances, it may be justified to add a sub-clause which relieves the Contractor of any responsibility for the cost of searching after the date stated in the Taking-Over Certificate. The following is an appropriate Sub-Clause for addition in Part II where the second example sub-clause of Sub-Clause 49.5 has been adopted:
No Responsi- 50.2 bility for Cost of
Searching of Dredging Work
Notwithstanding Sub-Clause 50.1, the Contractor shall
have no responsibility to bear the cost of searching for
any defect, shrinkage or other fault in respect of dredging work after the date stated in the Taking-Over Certificate.
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ALTERATIONS, ADDITIONS AND OMISSIONS
Variations 51.1
The
Engineer shall make any variation of the form,
quality or quantity of the Works or any part thereof that may, in his opinion, be necessary and for that purpose,
or if for any other reason it shall, in his opinion, be appropriate, he shall have the authority to instruct the
Contractor to do and the Contractor shall do any of the following:
(a) increase or decrease the quantity of any work included in the Contract, (b) omit any such work (but not if the omitted work is to
be carried out by the Employer or any other contractor), (c) change the character or quality or kind of any such work, (d) change the levels, lines, positions and dimensions of any part of the Works, (e) execute additional work of any kind necessary for the completion of the Works,
(f) change any specified sequence or timing of construction of any part of the Works.
No such variation shall in any way vitiate or invalidate the Contract, but the effect, if any, of all such variations shall be valued in accordance with Clause 52. Provided that where the issue of an instruction to vary the Works is necessitated by some default of or breach of contract by the Contractor or for which he is responsible, any additional cost attributable to such default shall be borne by the Contractor. The Engineer instructs the Contractor to make a variation when the Engineer determines to make a change in the Works from that envisaged in the Drawings and other Contract documents upon which tenders were based. A variation may in exceptional cases also
be necessitated by a default of the Contractor but, in such case, the resulting cost is necessarily borne by the Contractor. A variation is not, however, required if the actual quantities of the work envisaged at the time of tendering prove, on remeasurement, to be different from those recorded in the Bill of Quantities. The effect of any variation is taken into account in determining whether Sub-Clause 52.3 applies.
In the fourth edition the Engineer's power to vary the Works has been extended
with a case (f) covering specified sequence or timing of construction. The
emphasis here is on the word "specified", i.e. the sequence or timing must have been prescribed in the Specification and consequently have been a matter under the responsibility of the Employer. For a Contract comprising dredging and some types of reclamation work this SubClause may require to be varied in Part II in the following manner:
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Variations 51.1
Add final sentence as follows: Provided also that the Contractor shall be under no ob-
ligation to execute any variation which cannot be executed by the Contractor's Equipment being used or to be used on the Works. Dredging and reclamation work normally involves the use of major items of Contractor's Equipment, often few in number, and the Contract is entered into upon the basis of that Equipment. If additional work is required which would involve bringing or returning to the Site major items of Contractor's Equipment it is reasonable that this should be regarded as a new contract and not a variation of the original Contract unless the two parties to the Contract agree to treat it as such. A variation will normally have cost consequences and the Employer should be kept fully informed by the Engineer. Even if the variation can be carried out within a budget agreed by the Employer, he may require the opportunity to approve the instruction before it is
given to the Contractor, see Sub-Clause 2.1. The Contract should establish in Part II a procedure for such approval. The steps in such a procedure could be: 1. The Engineer prepares an authorisation request with proposed variations to the Specification and Contract quantities as well as an estimate of cost together with the basis and justification for the variation.
2. After the authorisation request has been approved by the Employer, the Engineer negotiates with the Contractor to determine the price of the variation. If the price is equal.
to or less than the amount sanctioned by the Employer, the Engineer is authorised to issue the necessary instructions for the variation to the Contractor. If the price is more than the sanctioned amount the Engineer should seek further authorisation from the Employer.
3. Irrespective of the procedure described above occasions will arise when it will be necessary for the Engineer to issue an instruction for a variation prior to reaching an agreement with the Contractor as to price, in order to avoid delaying work. Under such circumstances a two-part instruction for the variation will be issued, the first part instructing the Contractor to proceed with the work without stating the rates and prices, and the second part to be issued after further negotiations stating the rates and prices applicable. Nothing stated in this procedure should be construed as affecting the right of the Engineer to fix any rate or price which cannot be agreed between the Engineer and the Contractor as provided in Sub-Clauses 52.1 and 52.2. 4. In an emergency the Engineer shall not be restricted from issuing such instructions to the Contractor as the Engineer considers necessary. If he acts in such an emergency he shall inform the Employer as soon as possible having regard to the circumstances. See the example in the commentary under Sub-Clause 2.1.
Instructions 51.2 for Variations
The Contractor shall not make any variation without an
for instruction of the Engineer. Provided that no in-
struction shall be required for increase or decrease in the quantity of any work where such increase or decrease is not the result of an instruction given under this Clause, but is the result of the quantities exceeding or being less than those stated in the Bill of Quantities.
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The Contractor should be aware that there is no provision in the Conditions for the Contractor to make a variation without the written instruction of the Engineer. If the Contractor acts without an instruction he will have no grounds to claim for the cost of such variation.
Earlier editions of the FIDIC Conditions had, in Sub-Clause 51.2, a stipulation that instructions for variations should be in writing. The obligation for this is dealt with in the fourth edition in Sub-Clause 2.5 which requires that all instructions given by the Engineer under the Contract must be in writing.
Valuation of 52.1 Variations
All variations referred to in Clause 51 and any additions to the Contract Price which are required to be deter-
mined in accordance with Clause 52 (for the purposes of this Clause referred to as "varied work"), shall be valued at the rates and prices set out in the Contract if, in the opinion of the Engineer, the same shall be appli-
cable. If the Contract does not contain any rates or prices applicable to the varied work, the rates and prices in the Contract shall be used as the basis for valuation so far as may be reasonable, failing which, after due consultation by the Engineer with the Employer and the Contractor, suitable rates or prices shall be agreed upon between the Engineer and the Contractor. In the event of disagreement the Engineer shall fix such rates or prices as are, in his opinion, appropriate and shall notify the Contractor accordingly, with a copy to the Employer. Until such time as rates or prices are
agreed or fixed, the Engineer shall determine provi-
sional rates or prices to enable on-account payments to be included in certificates issued in accordance with Clause 60.
Work included in variations is valued in accordance with this Clause using, wherever reasonable, the rates and prices in the Bill of Quantities. If there are no applicable rates or prices, new rates or prices are to be based upon the Contract rates and prices so far as it may be reasonable to do so. Otherwise, suitable rates and prices are to be agreed. The exercise of his authority by the Engineer, under this Clause, may be subject to the specific approval of the Employer. See commentary under Sub-Clause 2.1. A portion of the payments to be made will often be in foreign currency. Any agreement fixing or determining rates or prices should deal with the proportions payable in different currencies.
Where provision is made in the Contract for payments in foreign currency, it may be advisable to make the following addition to this Sub-Clause in Part II.
Valuation of 52.1 Variations
Add final sentence as follows: The agreement, fixing or determination of any rates or
prices as aforesaid shall include any foreign currency and the proportion thereof. 114
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Power of 52.2
Engineer to
Fix Rates
Provided that if the nature or amount of any varied work relative to the nature or amount of the whole of the Works or to any part thereof, is such that, in the opin-
ion of the Engineer, the rate or price contained in the Contract for any item of the Works is, by reason of such
varied work, rendered inappropriate or inapplicable, then, after due consultation by the Engineer with the Employer and the Contractor, a suitable rate or price shall be agreed upon between the Engineer and the Contractor. In the event of disagreement the Engineer shall fix such other rate or price as is, in his opinion, appropriate and shall notify the Contractor accordingly, with a copy to the Employer. Until such time as rates or prices are agreed or fixed, the Engineer shall determine
provisional rates or prices to enable on-account payments to be included in certificates issued in accordance with Clause 60.
Provided also that no varied work instructed to be done by the Engineer pursuant to Clause 51 shall be valued under Sub-Clause 52.1 or under this Sub-Clause unless, within 14 days of the date of such instruction and, other than in the case of omitted work, before the commencement of the varied work, notice shall have been given either:
(a) by the Contractor to the Engineer of his intention to claim extra payment or a varied rate or price, or (b) by the Engineer to the Contractor of his intention to vary a rate or price.
If the nature or amount of the work involved differs so much from that included in the original Contract that the rates and prices are rendered inapplicable, it is the Engineer's task to agree appropriate rates and prices with the Contractor, or, if agreement cannot be reached, to fix the rates and prices. Existing rates and prices shall be used as a guide for the valuation as far as reasonable. The importance of consultation with both the parties is now highlighted in the Clause. Failure to reach agreement should not prevent the Contractor from receiving a payment on account for the work in question. In principle, the various prices of a lump sum character for the Contractor's preliminary and general costs are not affected each time a variation is valued, see Sub-Clause 52.3. Both the Engineer and the Contractor should pay particular attention to their respective obligations to give notice in accordance with the second sub-paragraph of Sub-Clause 52.2. As in the case of Sub-Clause 52.1 it is important that where payments in foreign currencies are provided for in the Contract a reference to this should be made in dealing with the power of the Engineer to fix rates. In such cases the following entry in Part II would be appropriate:
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Power of 52.2 Engineer to Fix
Rates
Add to the first paragraph final sentence as follows: The agreement or fixing of any rates or prices as aforesaid shall include any foreign currency and the propor-
tion thereof.
Where it is required to place some limitation on the range of items for which the rates and prices may be subject to review, this Sub-Clause may be varied in Part II as follows:
Power of 52.2 Engineer to Fix
Rates
At the end of the first paragraph add: Provided further that no change in the rate or price for any item contained in the Contract shall be considered unless such item accounts for an amount more than 2 per
cent of the Contract Price, and the actual quantity of work executed under the item exceeds or falls short of the quantity set out in the Bill of Quantities by more than 25 per cent.
Variations 52.3 Exceeding 15 per cent
If, on the issue of the Taking-Over Certificate for the whole of the Works, it is found that as a result of: (a) all varied work valued under Sub-Clauses 52.1 and
52.2, and
(b) all adjustments upon measurement of the estimated quantities set out in the Bill of Quantities, excluding Provisional Sums, dayworks and adjustments of price made under Clause 70, but not from any other cause, there have been additions to or deductions from the Contract Price which taken to-
gether are in excess of 15 per cent of the "Effective Contract Price" (which for the purposes of this SubClause shall mean the Contract Price, excluding Provisional Sums and allowance for dayworks, if any) then and in such event (subject to any action already taken under any other Sub-Clause of this Clause), after due consultation by the Engineer with the Employer and the Contractor, there shall be added to or deducted from the Contract Price such further sum as may be agreed between the Contractor and the Engineer or,failing agreement, determined by the Engineer having regard to the
Contractor's Site and general overhead costs of the Contract. The Engineer shall notify the Contractor of any determination made under this Sub-Clause, with a copy to the Employer. Such sum shall be based only on the amount by which such additions or deductions shall
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In preparing a tender, a contractor may distribute his on-costs and profit in various ways, of which the following are examples:
(a) On-costs such as mobilisation, demobilisation, installation of camps and workshops are usually dealt with as separate fixed sum items in the Bill of Quantities.
(b) On-cost and profit on Provisional Sums may be covered by supplementary items in the Bill, see Sub-Clauses 58.2 and 59.4. (c) On-cost and profit on dayworks ordered under Sub-Clause 52.4 will often be included in the rates inserted in the daywork schedule, or may be expressed as a percentage figure.
(d) All other on-costs and profit are likely to be spread over the unit rates in the Bill. These rates are to be applied (see Sub-Clause 52.1) to the valuation of variations. Part of the Contractor's on-costs, such as for the purchase of petrol, oil, lubricants, tyres and other consumable stores, will be directly related to the quantities of work actually carried out. Other on-costs, such as head office charges, senior superintendence and items such as those described in (a) above, are more of a fixed or lump sum character and not directly related to the amount of work done.
It is for this reason that Sub-Clause 52.3 has been included. If the total value of the work under (a) and (d) above (excluding price adjustment which is dealt with separately) differs from the total of the corresponding items in the Contract Price, the Contractor may gain on his fixed on-costs if the overall value is increased, or lose if the total is less
than that in the original Bill. The extent to which the Contractor is affected by such increases or decreases will depend on the degree to which the fixed on-costs have been covered by items described in (a) above instead of being spread over the unit rates. Under Sub-Clause 52.3, the first 15 per cent (not 10 per cent as in the third edition) up or down is disregarded, but any increase or decrease beyond this percentage may require an adjustment to the amount due to the Contractor. Any adjustment already made under another Sub-Clause of this Clause must be discounted.
As is the case in Sub-Clauses 52.1 and 52.2 an addition to Sub-Clause 52.3 may be necessary in contracts where payments in foreign currency have been provided for. The following would be appropriate:
Variations 52.3 Exceeding
15 per cent
Add final sentence as follows: The adjustment or fixing of any sum as aforesaid shall
have due regard to any foreign currency included in the Effective Contract Price and the proportion thereof.
Daywork 52.4
The
Engineer may, if in his opinion it is necessary or
desirable, issue an instruction that any varied work shall be executed on a daywork basis. The Contractor shall
then be paid for such varied work under the terms set out in the daywork schedule included in the Contract and at the rates and prices affixed thereto by him in the Tender. © FIDIC 1989
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The Contractor shall furnish to the Engineer such receipts or other vouchers as may be necessary to prove the amounts paid and, before ordering materials, shall submit to the Engineer quotations for the same for his approval. In respect of such Works executed on a daywork basis,
the Contractor shall, during the continuance of such work, deliver each day to the Engineer an exact list in duplicate of the names, occupation and time of all
workmen employed on such work and a statement, also in duplicate, showing the description and quantity of all materials and Contractor's Equipment used thereon or
therefor other than Contractor's Equipment which is included in the percentage addition in accordance with such daywork schedule. One copy of each list and statement will, if correct, or when agreed, be signed by the Engineer and returned to the Contractor. At the end of each month the Contractor shall deliver to the Engineer a priced statement of the labour, materi-
als and Contractor's Equipment, except as aforesaid, used and the Contractor shall not be entitled to any payment unless such lists and statements have been fully
and punctually rendered. Provided always that if the Engineer considers that for any reason the sending of such lists or statements by the Contractor, in accordance with the foregoing provision, was impracticable he shall nevertheless be entitled to authorise payment for such work, either as daywork, on being satisfied as to the time employed and the labour, materials and Contractor's Equipment used on such work, or at such value therefor as shall, in his opinion, be fair and reasonable.
Sub-Clause 52.4 deals with daywork, usually covered by a Provisional Sum in the Bill of Quantities, to be used for minor supplementary work for which no Bill item is applicable. A Daywork Schedule of Rates and Prices is normally included in the Contract as an annex to the Bill.
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PROCEDURE FOR CLAIMS Clause 53 is a new clause which has not appeared in previous editions of the FIDIC
Conditions. The intention of the clause generally is to set out a disciplined manner of dealing with claims which will be of advantage to both the Employer and the Contractor. Claims are certain to provoke differences particularly if the claim is established long after the work giving rise to the claim has been completed. Frequently in the past claims have been made when the project has been completed and the workforce has been dispersed and then both the Employer and the Contractor are dependent upon incomplete records and inevitably regard their memories of the events as being indisputable. As their respective memories were rarely identical it is understandable that they were both dissatisfied with the outcome. The fourth edition has introduced a claims procedure which places time limits for the notification and substantiation of claims and requires contemporary records to be kept. If such records are not kept, the Contractor may be limited in his entitlement.
Notice of 53.1 Claims
Notwithstanding any other provisions of the Contract, if the Contractor intends to claim any additional payment
pursuant to any Clause of these Conditions or otherwise, he shall give notice of his intention to the Engineer, with a copy to the Employer, within 28 days after the event giving rise to the claim has first arisen.
This Sub-Clause requires the Contractor to give notice to the Engineer "within 28 days after the event giving rise to the claim has first arisen". This is a practical requirement and not difficult to comply with. Contractors will generally maintain a Site diary and will have noted therein when the event first arises. Note that the Sub-Clause does not require the Contractor to make his claim then - it requires him to give notice of his intention to make a claim. The words 'or otherwise' are intended to encompass claims made on some legal ground (e.g. under the law governing the Contract) and not made pursuant to any Clause of these Conditions.
Contemporary 53.2 Records
Upon the happening of the event referred to in SubClause 53.1, the Contractor shall keep such contempo-
rary records as may reasonably be necessary to support any claim he may subsequently wish to make. Without necessarily admitting the Employer's liability, the Engineer shall, on receipt of a notice under Sub-Clause 53.1, inspect such contemporary records and may instruct the Contractor to keep any further contemporary records as are reasonable and may be material to the claim of which notice has been given. The Contractor
shall permit the Engineer to inspect all records kept pursuant to this Sub-Clause and shall supply him with copies thereof as and when the Engineer so instructs.
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The event giving rise to the claim having occurred, the Contractor is required to maintain contemporary records. This would be a logical act for a responsible contractor. It is to the advantage of the Contractor that he can call upon the Engineer to inspect such records and state if he (the Engineer) requires other records to be kept. In this manner the Contractor can satisfy himself that the records he is keeping will be suitable for the Engineer to evaluate the claim in due course. Note that the Engineer has a duty to inspect the records on being notified under Sub-Clause 53.1.
Substantiation 53.3
of Claims
Within 28 days, or such other reasonable time as may be agreed by the Engineer, of giving notice under Sub-
Clause 53.1, the Contractor shall send to the Engineer an account giving detailed particulars of the amount claimed and the grounds upon which the claim is based. Where the event giving rise to the claim has a continuing effect, such account shall be considered to be an interim account and the Contractor shall, at such intervals as the Engineer may reasonably require, send further interim accounts giving the accumulated amount of
the claim and any further grounds upon which it is based. In cases where interim accounts are sent to the
Engineer, the Contractor shall send a final account within 28 days of the end of the effects resulting from
the event. The Contractor shall, if required by the Engineer so to do, copy to the Employer all accounts sent to the Engineer pursuant to this Sub-Clause. If the circumstances giving rise to the claim are not continuing the Contractor has the obligation, but also the benefit, of submitting his claim to the Engineer for agreement or discussion while the event is still sufficiently recent for Site personnel to have the facts at their fingertips and the records readily available. If the circumstances are continuing the Engineer will inspect the records at reasonable intervals and should raise any points with which he disagrees or on which he wishes to have further information when he inspects the records.
Failure to 53.4 Comply
If the Contractor fails to comply with any of the provi-
of this Clause in respect of any claim which he seeks to make, his entitlement to payment in respect sions
thereof shall not exceed such amount as the Engineer or any arbitrator or arbitrators appointed pursuant to SubClause 67.3 assessing the claim considers to be verified by contemporary records (whether or not such records were brought to the Engineer's notice as required under Sub-Clauses 53.2 and 53.3).
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This Sub-Clause deals with the situation where the Contractor fails to comply with any of his obligations under Sub-Clause 53.1, 53.2 or 53.3 and defines the extent of his entitlement under such circumstances.
If the Contractor does not comply with the procedure laid down in the Conditions his entitlement to payment may be limited. It is considered that failure by the Contractor to make a claim in accordance with the provisions of Sub-Clauses 53.1, 53.2 or 53.3 should not bar the Contractor from receiving remuneration for any work which the Contractor can substantiate from contemporary records.
Payment of 53.5 Claims
The Contractor shall be entitled to have included in any
interim payment certified by the Engineer pursuant to
Clause 60 such amount in respect of any claim as the Engineer, after due consultation with the Employer and the Contractor, may consider due to the Contractor provided that the Contractor has supplied sufficient particulars to enable the Engineer to determine the amount due. If such particulars are insufficient to substantiate the whole of the claim, the Contractor shall be entitled to payment in respect of such part of the claim as such
particulars may substantiate to the satisfaction of the Engineer. The Engineer shall notify the Contractor of any determination made under this Sub-Clause, with a copy to the Employer. This Sub-Clause deals with payments in respect of claims including interim payments in respect of continuing claims and should be studied in conjunction with Sub-Clauses 60.5 to 60.9. It is intended to remove any possibility of contention that payments in respect of a claim must await the finalisation of the whole claim.
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CONTRACTOR'S EQUIPMENT, TEMPORARY WORKS AND MATERIALS
Clause 54 in the fourth edition combines Clauses 53 and 54 in the previous editions.
Sub-Clause 53.2 of the third edition has been dropped from the fourth edition as the requirement of removal of Equipment, etc., is now covered by Clause 33.
Contractor's 54.1 Equipment, Temporary Works and Materials; Exclusive Use for the Works
All Contractor's Equipment, Temporary Works and materials provided by the Contractor shall, when brought on to the Site, be deemed to be exclusively intended for the execution of the Works and the Contrac-
tor shall not remove the same or any part thereof, except for the purpose of moving it from one part of the
Site to another, without the consent of the Engineer. Provided that consent shall not be required for vehicles
engaged in transporting any staff, labour, Contractor's Equipment, Temporary Works, Plant or materials to or from the Site.
The principle of the Contract is that while the Employer becomes responsible for the care of the Permanent Works, Plant and materials on taking over the Works, the Contractor remains the owner of the Contractor's Equipment and Temporary Works because the Employer, under the Contract, is only paying for their use during the construction of the Permanent Works. However, the Employer must have some control over the Contractor's Equipment, Plant and materials brought on to the Site and his control is that they cannot be removed from the Site without the approval of the Engineer. In some contracts the Employer requires that the Contractor's Equipment, Temporary Works and materials be vested in the Employer and where this is the case it can be covered by two additional sub-clauses in Part II. The following wording may be appropriate: Sub-Clauses 54.2 and 54.3 shall be renumbered as 54.3 and 54.4 and Sub-Clauses 54.4 to 54.8 shall be renumbered as 54.6 to 54.10. Add additional Sub-Clauses as follows:
Vesting 54.2
All Contractor's Equipment, Temporary Works and materials owned by the Contractor, or by any company in which the Contractor has a controlling interest, shall, when on the Site, be deemed to be the property of the
Employer. Provided always that the vesting of such property shall not prejudice the right of the Contractor
to the sole use of the said Contractor's Equipment, Temporary Works and materials for the purpose of the Works nor shall it affect the Contractor's responsibility to operate and maintain the same under the provisions of the Contract.
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Revesting 54.5
and
Removal
Upon the removal, with the consent of the Engineer under Sub-Clause 54.1, of any such Contractor's Equipment, Temporary Works or materials as have been
deemed to have become the property of the Employer under Sub-Clause 54.2, the property therein shall be deemed to revest in the Contractor and, upon completion of the Works, the property in the remainder of such Contractor's Equipment, Temporary Works and materials, shall, subject to Clause 63, be deemed to revest in the Contractor.
Employer not 54.2 Liable for Damage
The Employer shall not at any time be mentioned in Clauses 20 and 65, for
liable, save as
the loss of or damage to any of the said Contractor's Equipment, Temporary Works or materials.
As the Contractor is the owner or lessee of the Contractor's Equipment, etc., and as in any case he is responsible for the care of the Works from the Commencement Date until the Taking Over of the Works it follows that the Contractor is responsible for any loss or damage thereto, see Clauses 20 and 65.
Customs 54.3 Clearance
The Employer will use his best endeavours in assisting the Contractor, where required, in obtaining clearance
through the Customs of Contractor's Equipment, materials and other things required for the Works.
Clearance through customs, import and export licences, port regulations, storage and transport regulations are normally the responsibility of the Contractor and he should take all necessary steps in sufficient time to meet the requirements of his programme. The Contractor is also required to pay the customs duties (unless exempted therefrom) and other dues for whatever he imports for the Contract.
The Employer undertakes to render whatever assistance he can to the Contractor in connection with clearances through customs, but the Contractor must ultimately be himself responsible.
Re-export of 54.4 Contractor's Equipment
In respect of any Contractor's Equipment which the
Contractor has imported for the purposes of the Works, the Employer will use his best endeavours to assist the
Contractor, where required, in procuring any necessary Government consent to the re-export of such Contrac-
tor's Equipment by the Contractor upon the removal thereof pursuant to the terms of the Contract.
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The Contractor is often allowed to import his Equipment and Temporary Works items on a temporary admittance basis, i.e., free of customs duties. Under such circumstances it is important to clarify the limits on the use of such Equipment and Temporary Works items as well as any time limit for their re-export and the consequences if such limit is not met and the Equipment and Temporary Works items remain in the country of the Works.
Conditions of 54,5 Hire of
Contractor's Equipment
With a view to securing, in the event of termination under Clause 63, the continued availability, for the purpose of executing the Works, of any hired Contrac-
tor's Equipment, the Contractor shall not bring on to the Site any hired Contractor's Equipment unless there is an agreement for the hire thereof (which agreement shall be deemed not to include an agreement for hire purchase) which contains a provision that the owner thereof will, on request in writing made by the Employer
within 7 days after the date on which any termination has become effective, and on the Employer undertaking to pay all hire charges in respect thereoffrom such date, hire such Contractor's Equipment to the Employer on the same terms in all respects as the same was hired to the Contractor save that the Employer shall be entitled to permit the use thereof by any other contractor employed by him for the purpose of executing and complet-
ing the Works and remedying any defects therein, under the terms of the said Clause 63. The location of the Site and the availability of Contractor's Equipment may present the Employer with substantial problems in the event that the Contractor fails to complete the execution of the Works and the Employer has to find an alternative means of completing the Works. This Sub-Clause has been inserted to ensure that if the Employer
has to find another contractor, or himself complete the Works, the Equipment and Temporary Works which will be required will be available if they are already on Site.
Costs for the 54.6 Purpose of Clause 63
In the event of the Employer entering into any agreement for
the hire of Contractor's Equipment pursuant
to Sub-Clause 54.5, all sums properly paid by the Employer under the provisions of any such agreement and all costs incurred by him (including stamp duties) in entering into such agreement shall be deemed,for the purpose of Clause 63, to be part of the cost of executing and completing the Works and the remedying of any defects therein.
This Sub-Clause deals with the cost consequences in the event that Sub-Clause 54.5 becomes operative. Reference should be made to Clause 63. 124
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Incorporation 54.7
of Clause in Subcontracts
The Contractor shall, where entering into any subcon-
tract for the execution of any part of the Works, incorporate in such subcontract (by reference or otherwise) the provisions of this Clause in relation to Contractor's Equipment, Temporary Works or materials brought on to the Site by the Subcontractor.
The conditions imposed upon the Contractor by Sub-Clauses 54.5 and 54.6 must be imposed upon all Subcontractors by the Contractor.
Approval of 54.8 Materials
not Implied
The
operation of this Clause shall not be deemed to
imply any approval by the Engineer of the materials or other matters referred to therein nor shall it prevent the
rejection of any such materials at any time by the Engineer.
There is nothing in Clause 54 which implies that under it approval is given to materials or any other matters but the Sub-Clause has been included to prevent any misunderstanding.
It may be necessary to deal with other issues in supplementary Sub-Clauses in Part II and these will possibly include: —Any limitations on the selection of Contractor's Equipment and Temporary Works.
—Any preference for local products. —Contractor to make his own arrangements for the temporary supply and distribution of services (water, elec-
tricity, fuel, etc.), his obligations as to the needs of
other contractors on the Site (in addition to his obligations under Clause 31), to his own Subcontractors, the Employer and the Engineer.
—Contractor to deal with special hazards from water, etc., on the Site and to take necessary safeguards. —Contractor to provide necessary maintenance for roads at the Site, permanent and temporary, and his obligations at completion of the Works.
Any Sub-Clauses to Clause 54 to be added in Part II should be considered in relation to Part II Sub-Clauses of Clause 34. Ambiguities and unnecessary repetition should be avoided.
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MEASUREMENT
Quantities 55.1
quantities set out in the Bill of Quantities are the estimated quantities for the Works, and they are not to The
be taken as the actual and correct quantities of the
Works to be executed by the Contractor in fulfilment of his obligations under the Contract.
The quantities in the Bill of Quantities are the quantities of work estimated when the Tender documents are prepared based upon the Drawings and the Specification. The actual quantities of work performed in the execution of the Contract are to be ascertained by measurement.
Works to be 56.1
Measured
The Engineer shall, except as otherwise stated, ascer-
and determine by measurement the value of the Works in accordance with the Contract and the Contam
tractor shall be paid that value in accordance with Clause 60. The Engineer shall, when he requires any part of the Works to be measured, give reasonable notice to the Contractor's authorised agent, who shall:
(a) forthwith attend or send a qualified representative to assist the Engineer in making such measurement, and (b) supply all particulars required by the Engineer. Should the Contractor not attend, or neglect or omit to send such representative, then the measurement made by the Engineer or approved by him shall be taken to be the correct measurement of such part of the Works. For the purpose of measuring such Permanent Works as are to be measured by records and drawings, the Engineer shall prepare records and drawings as the work proceeds and the Contractor, as and when called upon to do so in writing, shall, within 14 days, attend to exam-
ine and agree such records and drawings with the
Engineer and shall sign the same when so agreed. If the Contractor does not attend to examine and agree such records and drawings, they shall be taken to be correct. If, after examination of such records and drawings, the Contractor does not agree the same or does not sign the same as agreed, they shall nevertheless be taken to, be correct, unless the Contractor, within 14 days of such
examination, lodges with the Engineer notice of the
respects in which such records and drawings are claimed by him to be incorrect. On receipt of such notice, the Engineer shall review the records and drawings and either confirm or vary them.
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This Sub-Clause lays down the procedural rules for measuring the Works. Where the Works are to be measured by records and drawings, the Engineer prepares such records and drawings and obtains the Contractor's agreement thereto. Under Clause 60, the Contractor is paid based on monthly statements and the Engineer, when certifying, will take into account the value of work done as measured pursuant to this Sub-Clause. Under some circumstances it may be appropriate for the Contractor to measure certain parts of the Works under the observation and the control of the Engineer. Standard methods of measurement have been developed and to some extent used inter-
nationally. Should such a method be adopted in preparing the Bill of Quantities, it should be stated in the Contract and the same method should be used in the measurement of actual work done. However, should no such standard method be adopted, the principles for measurement and valuation to be applied should be clearly defined in the preamble to the Bill of Quantities.
Method of 57.1 Measurement
The Works shall be measured net, notwithstanding any general or local custom, except where otherwise pro-
vided for in the Contract.
This Sub-Clause requires measurements to be taken net where no other principle is prescribed. Thus, the quantity of shuttering is the net area in contact with the finished face of the concrete. However, there may be deviations from the general principle, e.g., for rock excavation where over-breakage is often measured and paid for under a separate item in the Bill of Quantities.
Breakdown of 57.2 Lump Sum Items
For the purposes of statements submitted in accordance with Sub-Clause 60.1, the Contractor shall submit to the
Engineer, within 28 days after the receipt of the Letter of Acceptance, a breakdown for each of the lump sum items contained in the Tender. Such breakdowns shall be subject to the approval of the Engineer.
This Sub-Clause requires a breakdown of lump sum items included in the Bill of Quantities in order that progress payments may reasonably reflect the distribution of the lump
sums over the period of the Contract. It is not intended that such breakdowns will necessarily apply to the valuation of variations.
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PROVISIONAL SUMS
Definition of 58.1
Provisional Sum
"Provisional Sum" means a sum included in the Contract and so designated in the Bill of Quantities for the execution of any part of the Works or for the supply of
goods, materials, Plant or services, or for contingencies, which sum may be used, in whole or in part, or not at all, on the instructions of the Engineer. The Contractor shall be entitled to only such amounts in respect of the work, supply or contingencies to which such Provisional
Sums relate as the Engineer shall determine in accordance with this Clause. The Engineer shall notify the Contractor of any determination made under this SubClause, with a copy to the Employer.
This Sub-Clause defines a Provisional Sum. A normal unit rate contract is likely to include in the Bill of Quantities, Provisional Sums for one or both of the following purposes (in separate sums or combined): —daywork (see Sub-Clause 52.4) —contingencies.
Beyond the above purposes, Provisional Sums should only be used when absolutely necessary as they introduce an element of uncertainty to the Contractor in the requirements of the Contract. They should cover only such instances where it is not feasible to reach a conclusion at the time of preparation of the tender documents, e.g.: —
—
it has not been possible at the time of inviting tenders for the Contract to define some part of the Works in sufficient detail to allow tenderers to quote firm rates and prices, or it has not been decided at the time of inviting tenders whether a particular item of work will actually be included in the Contract, or
—
it has been decided to invite separate tenders for an item of work, goods, materials, Plant or services from specialist firms and to make this the subject of a nominated Subcontract.
The amounts to be included in the Contract under Provisional Sum items are assessed and inserted in the Bill of Quantities by the Engineer prior to issue to tenderers. Items covered by Provisional Sums may include the supply and delivery to the Site of Plant and/or materials, (e.g., in the interests of standardisation of operation and maintenance and supply of spare parts), work carried out at Site and the provision of such services as superintendence of erection and commissioning. Such work may be carried out either by the Contractor or by a nominated Subcontractor, see Clause 59.
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Use of 58.2 Provisional
Sums
In respect of every Provisional Sum the Engineer shall have authority to issue instructions for the execution of work or for the supply of goods, materials, Plant or services by.
(a) the Contractor, in which case the Contractor shall be entitled to an amount equal to the value thereof determined in accordance with Clause 52, (b) a nominated Subcontractor, as hereinafter defined,
in which case the sum to be paid to the Contractor therefor shall be determined and paid in accordance with Sub-Clause 59.4.
The authority of the Engineer to give instructions for work included under Provisional Sums may be restricted under Clause 2. If it is decided to invite tenders for work covered by a Provisional Sum, the procedures to be followed are similar to those for the Contract. Should the Contractor have the appropriate capability and experience, and wish to do so, there is no reason why he should not be invited to tender, but he must be prepared to compete with other tenderers.
Production of 58.3 Vouchers
The Contractor shall produce to the Engineer all quotations, invoices, vouchers and accounts or receipts in
connection with expenditure in respect of Provisional Sums, except where work is valued in accordance with rates or prices set out in the Tender.
This Sub-Clause stipulates that in order to obtain payment for work under Provisional Sums the Contractor must satisfy the Engineer that competitive quotations have been obtained and all relevant vouchers must be produced unless the work can be valued in accordance with rates and prices set out in the Bill of Quantities.
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NOMINATED SUBCONTRACTORS
Definition 59.1
of Nominated
All specialists, merchants, tradesmen and others executing any work or supplying any goods, materials, Plant or services for which Provisional Sums are included in the Contract, who may have been or be nominated or selected or approved by the Employer or the Engineer, and all persons to whom by virtue of the provisions of the Contract the Contractor is required to subcontract
Subcontractors
shall, in the execution of such work or the supply of such
goods, materials, Plant or services, be deemed to be subcontractors to the Contractor and are referred to in this Contract as "nominated Subcontractors". The term "nominated Subcontractor" is defined in Sub-Clause 59.1. Once appointed, the
nominated Subcontractor's relationship with the Contractor, is defined in a Subcontract Agreement drawn up and signed by the Contractor and the Subcontractor. The important element in the arrangement is that the Employer wishes the Contractor to be responsible for the administration and co-ordination of the Subcontract and pays the Contractor for such services. This is not the case where the Employer enters into a
separate direct contract for such work as, under the latter circumstances, the Engineer provides the administration and co-ordination on behalf of the Employer.
Nominated 59.2
Subcontractors; Objection to Nomination
The Contractor shall not be required by the Employer
or the Engineer, or be deemed to be under any obligation, to employ any nominated Subcontractor against whom the Contractor may raise reasonable objection, or
who declines to enter into a subcontract with the Contractor containing provisions:
(a) that in respect of the work, goods, materials, Plant or services the subject of the subcontract, the nominated
Subcontractor will undertake towards the Contractor such obligations and liabilities as will enable the Contractor to discharge his own obligations and liabilities towards the Employer under the terms of the Contract and will save harmless and indemnify the Contractor from and against the same and from all claims, proceedings, damages, costs, charges and expenses whatsoever arising out of or in connection therewith, or arising out
of or in connection with any failure to perform such obligations or to fulfil such liabilities, and (b) that the nominated Subcontractor will save harmless and indemnify the Contractor from and against any neg-
ligence by the nominated Subcontractor, his agents, workmen and servants and from and against any mis-
use by him or them of any Temporary Works provided by the Contractor for the purposes of the Contract and from all claims as aforesaid. 130
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It is important to ensure that the Contractor approves of the Subcontractor and is prepared to collaborate with him. The Contractor can refuse the nomination if he has reasonable grounds for so doing. The Subcontractor has to undertake toward the Con— tractor such obligations and liabilities as will enable the Contractor to discharge his own obligations and liabilities to the Employer. Such obligations and liabilities of the nominated Subcontractor will in many respects be the same as those of the Contractor (materials and workmanship, Contractor's Equipment, labour, insurances, securities, Engineer's instructions, care of the Works,etc.), but they may also be adapted to the size of the Subcontract. Liquidated damages (see Clause 47) is an example. It is important, however, that the nominated Subcontractor has at least the same incentive as the Contractor to complete on time. The failure of a nominated Subcontractor to perform could have serious consequences for both the Contractor and the Employer. It is, therefore, recommended that before tenders are invited for a Subcontract, not only the Employer but also the Contractor approve the firms to be invited. The Contractor is then able to request the deletion of any firm to which he reasonably objects and to suggest the addition of any firm in which he has confidence and past experience of good working relations. Such deletions or additions would be subject to the consent of the Employer and the Engineer.
As the documents issued to tenderers for a nominated Subcontract will eventually become part of the Subcontract Agreement, the Contractor should be given the opportunity to comment upon them before they are issued. He should also have an opportunity
to comment upon any reservations inserted by potential Subcontractors in their tenders. This procedure is not possible when a nominated Subcontract has to be
placed before tenders are invited for the Contract, due, for instance, to long delivery periods. In such a case all tenderers for the Contract must be provided with full details of the nominated Subcontract in the tender documents and the Engineer should endeavour, when inviting tenders for the nominated Subcontract, to make the terms of the nominated Subcontract compatible with those he will expect to include in the tender documents for the Contract. If the Contractor declines to enter into a Subcontract with a nominated Subcontractor, the Engineer will have alternative lines of action open to him. He can: —
nominate an alternative Subcontractor, or
—
modify the terms of the Subcontract, or
arrange for the Contractor to carry out the work himself through a variation under Clause 51.
Design 59.3 Requirements to be Expressly Stated
If in connection with any Provisional Sum the services to
be provided include any matter of design or specifi-
cation of any part of the Permanent Works or of any
Plant to be incorporated therein, such requirement shall be expressly stated in the Contract and shall be included in any nominated Subcontract. The nominated Subcon-
tract shall specify that the nominated Subcontractor providing such services will save harmless and indemnfy the Contractor from and against the same and from all claims, proceedings, damages, costs, charges and expenses whatsoever arising out of or in connection with any failure to perform such obligations or to fulfil such liabilities. ©FIDIC 1989
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It is often the case that specialist nominated Subcontractors are required to undertake and be responsible for the detailed design of items or works included in the Subcon-
tract. The Engineer must provide an outline of any such design and specification requirement in the documents issued to tenderers for the Contract, and the Subcontract documents issued to tenderers must contain an outline specification giving the basic requirements within which the nominated Subcontractor can offer his own speciality.
So far as the Employer is concerned, the Contractor remains responsible to him under the Contract for the Subcontractor's designs and operations. Nominated Subcontractors sometimes allege that they are cut off from access to the Engineer and through him to the Employer. This problem can be alleviated if the Contractor agrees that on technical matters related to specification and design details, the Subcontractor and the Engineer deal directly with each other, keeping the Contractor fully informed, and providing for his participation whenever appropriate.
Payments to 59.4 Nominated Subcontractors
For all work executed or goods, materials, Plant or services supplied by any nominated Subcontractor, the
Contractor shall be entitled to:
(a) the actual price paid or due to be paid by the Con-
tractor, on the instructions of the Engineer, and in accordance with the subcontract; (b) in respect of labour supplied by the Contractor, the sum, if any, entered in the Bill of Quantities or, if instructed by the Engineer pursuant to paragraph (a) of Sub-Clause 58.2, as may be determined in accordance with Clause 52;
(c) in respect of all other charges and profit, a sum being a percentage rate of the actual price paid or due to be paid calculated, where provision has been made in the Bill of Quantities for a rate to be set against the relevant Provisional Sum, at the rate inserted by the Contractor against that item or, where no such provision has been made, at the rate inserted by the Contractor in the Appendix to Tender and repeated where provision for such is made in a special item provided in the Bill of Quantities for such purpose.
It may be convenient to include in the Bill of Quantities, after each Provisional Sum item which may become the subject of a nominated Subcontract, a supplementary item to permit tenderers for the Contract to enter a percentage figure to cover the cost (plus overhead charges and profit) of the Contractor's superintendence of the Subcontractor. As the extent of the Contractor's superintendence will depend on the nature of individual Subcontracts, this is a more satisfactory method than inserting a single percentage in the Appendix to Tender and applying this percentage to expenditure under any or all of the Provisional Sums. It is important to ensure that the Specification contains precise instructions as to what is to be covered by percentage figures. 132
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Certificate 59.5
of Payments
to Nominated Subcontractors
Before issuing, under Clause 60, any certificate, which includes any payment in respect of work done or goods, materials, Plant or services supplied by any nominated Subcontractor, the Engineer shall be entitled to demand from the Contractor reasonable proof that all payments, less retentions, included in previous certificates in respect of the work or goods, materials, Plant or services
of such nominated Subcontractor have been paid or discharged by the Contractor. If the Contractor fails to supply such proof then, unless the Contractor (a) satisfies the Engineer in writing that he has reason-
able cause for withholding or refusing to make such payments and (b) produces to the Engineer reasonable proof that he has so informed such nominated Subcontractor in writing,
the Employer shall be entitled to pay to such nominated Subcontractor direct, upon the certificate of the Engineer, all payments, less retentions, provided for in the nominated Subcontract, which the Contractor has failed to make to such nominated Subcontractor and to deduct by way of set-off the amount so paid by the Employer
from any sums due or to be become due from the Employer to the Contractor.
Provided that, where the Engineer has certified and the
Employer has paid direct as aforesaid, the Engineer shall, in issuing any further certificate in favour of the Contractor, deduct from the amount thereof the amount so paid, direct as aforesaid, but shall not withhold or delay the issue of the certificate itself when due to be issued under the terms of the Contract. Serious difficulties can arise if the Contractor fails or refuses to pay at the appropriate time the amounts due to a nominated Subcontractor. This Sub-Clause lays down the procedure if the Contractor cannot, or will not, without giving satisfactory reasons to the Engineer, make payments due to nominated Subcontractors. Under given circumstances the Employer may pay the nominated Subcontractor directly and recover the amount from the Contractor, possibly by deduction from payments due to be made to the Contractor by the Employer.
The subject matter of Sub-Clause 59 (6) in the third edition appears in Sub-Clause 4.2 of the fourth edition.
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CERTIFICATES OF PAYMENT
In previous editions of FIDIC Conditions of Contract, the payment arrangements have been left for individual drafting for each contract with guidance in the Part II aidememoire. However, experience has shown that certain payment arrangements are used so frequently that they should be reflected in Part I, and they are so included in the fourth edition. Examples of supplementary stipulations which are more likely to vary from contract to contract and which should appear in Part II are given below. Together, the Part I and appropriate Part II sub-clauses should form a complete payment clause. They should be carefully examined and adapted as necessary for each individual contract. The Clause assumes that progress payments will be made on a monthly basis according to the unit rates for the work carried out, as is generally the case for contracts of works of civil engineering construction. Other methods of payment include: lump sum with stage payments of fixed parts at fixed time intervals, or lump sum with stage payments
of fixed parts corresponding to defined parts of the works as and when each part of the Works has been completed , or payments on a cost reimbursement basis. In an international civil engineering contract, different methods of payment could apply to different parts of the Works, e.g., measurement at unit rates for the Permanent Works, cost reimbursement for daywork, lump sums in the section of the Bill of Quantities for Temporary Works, stage payments payable at fixed time intervals for the running of Temporary Works (camp, water supply, electricity, roads, etc.,) and as stage payments payable in fixed parts for construction of camp, of roads, of water supply facilities, etc. It is therefore important that the Contract makes it quite clear how the different parts of the Works shall be paid for, see commentary to Clause 57.
Monthly 60.1
Statements
The Contractor shall submit to the Engineer after the end of each month six copies, each signed by the Con-
tractor's representative approved by the Engineer in accordance with Sub-Clause 15.1, of a statement, in such form as the Engineer may from time to time prescribe, showing the amounts to which the Contractor
considers himself to be entitled up to the end of the month in respect of (a) the value of the Permanent Works executed
(b) any other items in the Bill of Quantities including those for Contractor's Equipment, Temporary Works, dayworks, and the like (c) the percentage of the invoice value of listed materials, all as stated in the Appendix to Tender, and Plant delivered by the Contractor on the Site for incorporation in the Permanent Works but not incorporated in such Works
(d) adjustments under Clause 70
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In recognition of the importance to the Contractor of a predictable and prompt cash flow, payments are to be made monthly on the basis of statements submitted by the Contractor and checked and certified by the Engineer. If, following the check by the Engineer, the amount due to the Contractor is less than the minimum amount stated in the Appendix to Tender, no certificate is issued and the payment is included in the following certificate.
The monthly statements shall cover the five items listed in Sub-Clause 60.1. As to the listed materials, item (c), it is assumed that the Appendix to Tender will identify basic materials of importance to the Contract, such as, for example, cement, reinforcement steel
and structural steel. It is also assumed that the Engineer shall have approved the
materials for incorporation in the Works. The payment for listed materials is reduced to 90 per cent of the invoice value (or other suitable percentage) in recognition that there is likely to be some wastage.
Monthly 60.2
Payments
The Engineer shall, within 28 days of receiving such statement, certify to the Employer the amount of pay-
ment to the Contractor which he considers due and payable in respect thereof, subject: (a) firstly, to the retention of the amount calculated by applying the Percentage of Retention stated in the Appendix to Tender, to the amount to which the Contractor is entitled under paragraphs (a), (b), (c) and (e) of Sub-Clause 60.1 until the amount so retained reaches the Limit of Retention Money stated in the Appendix to Tender, and
(b) secondly, to the deduction, other than pursuant to Clause 47, of any sums which may have become due and payable by the Contractor to the Employer.
Provided that the Engineer shall not be bound to certify any payment under this Sub-Clause if the net amount
thereof, after all retentions and deductions, would be less than the Minimum Amount of Interim Certificates stated in the Appendix to Tender.
Notwithstanding the terms of this Clause or any other Clause of the Contract no amount will be certified by the Engineer for payment until the performance security, required under the Contract, has been provided by the Contractor and approved by the Employer.
f
Before certifying for payment, the Engineer shall make such deductions as the Contract
prescribes. Most important are the payments on account previously made and the Retention Money stated in the Appendix to Tender, normally ten per cent of each state-
ment (except for adjustments under Clause 70), but subject to a maximum in total, also given in the Appendix to Tender (five per cent would be reasonable for a big complex contract). FIDIC 1989
135
It should be observed that this Sub-Clause leaves to the Employer the responsibility of determining in the case that liquidated damages are due whether to make the appropriate deduction or not. In addition, the Employer may be required by law to effect certain deductions, e.g., for taxes. All other deductions should be made by the Engineer, taking into consideration information received from the Employer if appropriate. The Sub-Clause contains strict stipulations regarding the time allowed to the Engineer for issuing the payment certificates. The time within which payment must be made by the Employer, after the Engineer has certified, is covered by Sub-Clause 60.10. It is
the duty of the Engineer to comply with his certification obligation as, if he is not satisfied concerning any particular item or part thereof, he can omit such item or part and deal with it under Sub-Clause 60.4. In the event of failure by the Employer to make payment within the times stated, the Employer will be liable to pay interest on the amount overdue, in accordance with Sub-Clause 60.10 and the Contractor may, under Clause 69, suspend work or terminate his employment under the Contract.
Payment of 60.3 Retention Money
(a) Upon the issue of the Taking-Over Certificate with respect to the whole of the Works, one half of the Retention Money, or upon the issue of a Taking-Over
Certificate with respect to a Section or part of the Per-
manent Works only such proportion thereof as the Engineer determines having regard to the relative value of such Section or part of the Permanent Works, shall be certified by the Engineer for payment to the Contractor.
(b) Upon the expiration of the Defects Liability Period for the Works the other half of the Retention Money shall be certified by the Engineer for payment to the Contractor. Provided that, in the event of different Defects Liability Periods having become applicable to different Sections or parts of the Permanent Works pursuant to Clause 48, the expression "expiration of the Defects Liability Period" shall, for the purposes of this Sub-Clause, be deemed to mean the expiration of the latest of such periods. Provided also that if at such time, there shall remain to be executed by the Contractor any work ordered, pursuant to Clauses 49 and 50, in respect of the Works, the Engineer shall be entitled to withhold certification until completion of such work of so much of the balance of the Retention Money as shall, in the opinion of the Engineer, represent the cost of the work remaining to be executed.
The Retention Money is one of the securities held by the Employer to ensure fulfilment by the Contractor of his obligations in respect of defects. This Sub-Clause specifies under what conditions the Retention Money shall be released to the Contractor. 136
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Correction of 60,4 Certificates
The Engineer may by any interim certificate make any
correction or modification in any previous certificate
which shall have been issued by him and shall have authority, if any work is not being carried out to his satisfaction, to omit or reduce the value of such work in any interim certificate.
As stated in the comment on Sub-Clause 60.2 the Engineer may, if he is not satisfied with any item, or part thereof, included by the Contractor in his monthly statement, delete such item and include it in a later certificate when he is satisfied that it represents an amount due. Also, the Engineer may make corrections in any monthly certificate to a certificate he has previously issued which he subsequently deems needs correction.
Statement at 60.5 Completion
Not later than 84 days after the issue of the Taking-Over Certificate in respect of the whole of the Works, the
Contractor shall submit to the Engineer a Statement at Completion with supporting documents showing in detail, in the form approved by the Engineer,
(a) the final value of all work done in accordance with the Contract up to the date stated in such Taking-Over Certificate (b) any further sums which the Contractor considers to be due and
(c) an estimate of amounts which the Contractor considers will become due to him under the Contract.
The estimated amounts shall be shown separately in such Statement at Completion. The Engineer shall certify payment in accordance with Sub-Clause 60.2.
It is sometimes contended that the period of 84 days allowed to the Contractor to produce the Statement at Completion is short having regard to the work which is required to produce this statement and its binding nature. Much will depend upon the maintenance of satisfactory records on the Site and on progressive calculations as the work is
executed. It is after all in the best interests of the Contractor himself to have his statement submitted and substantiated as soon as is practicable.
Final 60.6
Statement
Not later than 56 days after the issue of the Defects Liability Certificate pursuant to Sub-Clause 62.1, the
Contractor shall submit to the Engineer for consideration a draft final statement with supporting documents showing in detail, in the form approved by the Engineer,
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If the Engineer disagrees with or cannot verify any part of the draft final statement, the Contractor shall submit such further information as the Engineer may reasonably require and shall make such changes in the draft as may be agreed between them. The Contractor shall then prepare and submit to the Engineer the final statement as agreed (for the purposes of these Conditions referred to as the "Final Statement").
The practice for the Contractor to submit a draft final statement to the Engineer, after the issue of the Defects Liability Certificate, for agreement between them before the Final
Statement is submitted is one which has proved to operate satisfactorily. Again there are those who will argue that the time allowed (56 days) is too short but whatever time was fixed there would be complaints by some that the time is insufficient. If there are
substantial grounds for the period to be extended the Engineer should request the Employer's agreement to a reasonable extension. If there are differences of opinion which take time to resolve, the Engineer should issue a further interim certificate or certificates for that part of the draft final statement on which there is no difference of opinion.
Discharge 60.7
Upon submission of the Final Statement, the Contractor shall give to the Employer, with a copy to the Engineer, a written discharge confirming that the total of the Final Statement represents full and final settlement of
all monies due to the Contractor arising out of or in respect of the Contract. Provided that such discharge
shall become effective only after payment due under the Final Certificate issued pursuant to Sub-Clause 60.8 has been made and the performance security referred to in Sub-Clause 10.1, if any, has been returned to the Contractor.
The Contractor's entitlement to make a claim under the Contract expires when the Final Statement is submitted. Hence it is reasonable to require the Contractor to give a written discharge confirming the total. Many Employers require such a discharge. Note that the Contractor has two safeguards, namely that the discharge does not take effect until payment of the Final Certificate has been made and the performance security, if any, has been returned to the Contractor.
Final 60.8 Certificate
Within 28 days after receipt of the Final Statement, and
the written discharge, the Engineer shall issue to the
Employer (with a copy to the Contractor) a Final Certificate stating (a) the amount which, in the opinion of the Engineer, is finally due under the Contract, and
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(b) after giving credit to the Employer for all amounts previously paid by the Employer and for all sums to
which the Employer is entitled under the Contract, other than Clause 47, the balance, if any, due from the Employer to the Contractor or from the Contractor to the Employer as the case may be.
A time limit is imposed upon the Engineer in regard to his certification to the Employer of the amount due to the Contractor under the Final Certificate. As the Engineer and the Contractor will have reached agreement on the basis of the draft final statement, submitted by the Contractor, there is no reason why the Engineer cannot comply within the
28 days. In a similar manner to Sub-Clause 60.2, relating to interim certificates, the deduction of liquidated damages, if due, is left to the Employer.
Cessation of 60.9 Employer's Liability
The Employer shall not be liable to the Contractor for any matter or thing arising out of or in connection with the Contract or execution of the Works, unless the
Contractor shall have included a claim in respect
thereof in his Final Statement and (except in respect of matters or things arising after the issue of the TakingOver Certificate in respect of the whole of the Works)
in the Statement at Completion referred to in SubClause 60.5.
This Sub-Clause complements what is written in Sub-Clause 60.7. The subject matter is derived from Sub-Clause 62 (2) of the third edition.
Time for 60.10 The amount due to the Contractor under any interim
Payment
certificate issued by the Engineer pursuant to this
Clause, or to any other term of the Contract, shall, subject to Clause 47, be paid by the Employer to the Contractor within 28 days after such interim certificate has been delivered to the Employer, or, in the case of
the Final Certificate referred to in Sub-Clause 60.8, within 56 days, after such Final Certificate has been delivered to the Employer. In the event of the failure of the Employer to make payment within the times stated, the Employer shall pay to the Contractor interest at the
rate stated in the Appendix to Tender upon all sums unpaid from the date by which the same should have been paid. The provisions of this Sub-Clause are with-
out prejudice to the Contractor's entitlement under Clause 69.
As a recompense for meeting specific time limits for the submission of the draft final statement and the agreement thereof with the Engineer, the Contractor has the right to receive payment from the Employer within specific time limits. ©FIDIC 1989
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If the Employer fails to meet his commitments under this Sub-Clause, the Contractor becomes entitled to interest on overdue payments as well as his entitlements under Clause 69. Example sub-clauses for inclusion in Part II to deal with other aspects of payments are
given below. All are examples only and care should be taken to ensure that the form adopted is consistent with the payment procedures of the country in question and, in the event that international funding is being provided, complies with the requirements of the financing institutions concerned.
Where payments are to be made in various currencies in predetermined proportions and calculated at fixed rates of exchange the following 3 Sub-Clauses, which should be taken together, may be added:
Currency of Account
60.
and Rates
of Exchange
The currency of account shall be the (insert name of currency) and for the purposes of the Contract conversion between (insert name of currency) and other currencies stated in the Appendix to Tender shall be made
in accordance with the Table of Exchange Rates in the Appendix to Tender. Conversion between the currencies stated in such Table other than the (insert name of currency) shall be made at rates of exchange determined by
use of the relative rates of exchange between such currencies and the (insert name of currency) set out therein.
Payments to Contractor
60.
All payments to the Contractor by the Employer shall be made (a) in the case of payment(s) under Sub-Clauses 70.2
and (insert number of any other applicable Clause), in (insert name of currency/ies);
(b) in the case of payments for certain provisional sum items excluded from the Appendix to Tender, in the currencies and proportions applicable to these items at the time when the Engineer gives instructions for the work covered by these items to be carried out; (c) in any other case, including Increase or Decrease of Costs under Sub-Clause 70.1, in the currencies and proportions stated in the Appendix to Tender as applicable to such payment provided that the proportion of currencies stated in the Appendix to Tender may from time to time upon the application of either party be varied as may be agreed.
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Payments 60. to
All payments to the Employer by the Contractor includ-
Employer
be
ing payments made by way of deduction or set-off shall
made
(a) in the case of credit(s) under Sub-Clause(s) 70.2 and
(insert number of any other applicable Clause), in (insert name of currency/ies);
(b) in the case of liquidated damages under Clause 47, in (insert name of currency/ies); (c) in the case of reimbursement of any sum previously expended by the Employer, in the currency in which the sum was expended by the Employer; (d) in any other case, in such currency as may be agreed.
If the part payable in a particular currency of any sum payable to the Contractor is wholly or partly insufficient to satisfy by way of deduction or set-off a payment due to the Employer in that currency, in accordance with the provisions of this Sub-Clause, then the Employer may if he so desires make such deduction or set-off wholly
or partly as the case may be from the balance of such sum payable in other currencies. Where all payments are to be made in one currency the following Sub-Clause may be added:
Currency of Account and Payments
60.
The currency of account shall be the (insert of name of currency) and all payments made in accordance with the Contract shall be in (insert name of currency). Such (insert name of currency) other than for local costs, shall
be fully convertible. The percentage of such payments attributed to local costs shall be as stated in the Appendix to Tender.
Where place of payment is to be defined the following Sub-Clause may be added:
Place of Payment
60.
Payments to the Contractor by the Employer shall be made into a bank account nominated by the Contractor
in the country of the currency of payment. Where payment is to be made in more than one currency separate bank accounts shall be nominated by the Contractor in
the country of each currency and payments shall be made by the Employer accordingly.
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Where provision is to be included for an advance payment the following Sub-Clause may be added:
Advance Payment
60.
An advance payment of the amount stated in the Appendix to Tender shall, following the presentation by the Contractor to the Employer of an approved performance security in accordance with Sub-Clause 10.1 and a Guarantee in terms approved by the Employer for the full value of the advance payment, be certified by the Engineer for payment to the Contractor. Such Guarantee shall be progressively reduced by the amount repaid by the Contractor as indicated in interim certificates of the Engineer issued in accordance with this Clause. The advance payment shall not be subject to retention. The advance payment shall be repaid by way of reduction in interim certificates commencing with the next certificate issued after the total certified value of the Permanent
Works and any other items in the Bill of Quantities (excluding the deduction of retention) exceeds (insert figure) per cent of the sum stated in the Letter of Acceptance. The amount of the reduction in each interim certificate shall be one (insert fraction) of the difference between the total value of the Permanent Works and any
other items in the Bill of Quantities (excluding the deduction of retention) due for certification in such interim certificate and the said value in the last preceding interim certificate until the advance payment has been repaid in full. Provided that upon the issue of a TakingOver Certificate for the whole of the Works or upon the happening of any of the events specified in Sub-Clause
63.1 or termination under Clauses 65, 66 or 69, the whole of the balance then outstanding shall immediately become due and payable by the Contractor to the Employer.
Approval only 61.1
by Defects
Liability Certificate
Only the Defects Liability Certificate, referred to in Clause 62, shall be deemed to constitute approval of the Works.
In major contracts, it is common for the Works to be taken over in Sections or parts, each giving rise to a separate Taking-Over Certificate and, consequently, to a separate
Defects Liability Period. However, Clauses 61 and 62 make it clear that there is only one Defects Liability Certificate, which is issued at the expiration of the last Defects Liability Period to occur under the Contract. This Certificate establishes that the Contractor has fulfilled his obligation under the Contract to execute, complete and remedy any defects in the Works to the satisfaction of the Engineer, and that in consequence, the Contractor's physical obligations in relation to the Contract have been completed. 142
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Defects 62.1 Liability Certificate
The Contract shall not be considered as completed until a Defects Liability Certificate shall have been signed by the Engineer and delivered to the Employer, with a copy
to the Contractor, stating the date on which the Contractor shall have completed his obligations to execute and complete the Works and remedy any defects therein to the Engineer's satisfaction. The Defects Liability Cer-
tificate shall be given by the Engineer within 28 days after the expiration of the Defects Liability Period, or, if different defects liability periods shall become applicable to different Sections or parts of the Permanent Works, the expiration of the latest such period, or as soon thereafter as any works instructed, pursuant to Clauses 49 and 50, have been completed to the satisfac-
tion of the Engineer. Provided that the issue of the Defects Liability Certificate shall not be a condition precedent to payment to the Contractor of the second portion of the Retention Money in accordance with the conditions set out in Sub-Clause 60.3.
Although the Defects Liability Periods expire automatically the expiration of each is normally recorded in a letter from the Engineer to the Employer with a copy to the Contractor. When the last Defects Liability Period ends, any outstanding work will normally only represent a very small proportion of the total Contract value but, to protect the Employer, the Defects Liability Certificate is not issued until this work has been satisfactorily completed. The procedure for the release of the Retention Money in relation to the Taking-Over Certificates and to the expiration of the Defects Liability Period for the Works is detailed in Sub-Clause 60.3.
Unfulfilled 62.2
Obligations
Notwithstanding the issue of the Defects Liability Certificate the Contractor and the Employer shall remain
liable for the fulfilment of any obligation incurred under the provisions of the Contract prior to the issue of the Defects Liability Certificate which remains unperformed at the time such Defects Liability Certificate is issued and, for the purposes of determining the nature and extent of any such obligation, the Contract shall be deemed to remain in force between the parties to the Contract.
Notwithstanding the issue of the Defects Liability Certificate, each party remains liable for the fulfilment of any obligation incurred under the Contract which remains unperformed at the time such Defects Liability Certificate is issued and, for this purpose, the Contract remains in force between the parties. Such unperformed obligations can only
be of a financial or administrative nature as, with the issue of the Defects Liability Certificate, the Contractor's physical obligations will have been completed (see commentary to Sub-Clause 61.1).
Any outstanding liabilities of the Employer to the Contractor should not delay either the release of the performance security or the issue of the Defects Liability Certificate. © FIDIC 1989
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REMEDIES
Default of 63.1 Contractor
If the Contractor is deemed by law unable to pay his
debts as they fall due, or enters into voluntary or invol-
untary bankruptcy, liquidation or dissolution (other than a voluntary liquidation for the purposes of amalgamation or reconstruction), or becomes insolvent, or makes
an arrangement with, or assignment in favour of, his creditors, or agrees to carry out the Contract under a committee of inspection of his creditors, or if a receiver,
administrator, trustee or liquidator is appointed over any substantial part of his assets, or if, under any law or regulation relating to reorganisation, arrangement or
readjustment of debts, proceedings are commenced
against the Contractor or resolutions passed in connection with dissolution or liquidation or if any steps are taken to enforce any security interest over a substantial part of the assets of the Contractor, or if any act is done
or event occurs with respect to the Contractor or his assets which, under any applicable law has a substantially similar effect to any of the foregoing acts or events, or if the Contractor has contravened Sub-Clause
3.1, or has an execution levied on his goods, or if the Engineer certifies to the Employer, with a copy to the Contractor that, in his opinion, the Contractor: (a) has repudiated the Contract, or (b) without reasonable excuse has failed (i) to commence the Works in accordance with SubClause 41.1, or (ii) to proceed with the Works, or any Section thereof, within 28 days after receiving notice pursuant to SubClause 46.1, or
(c) has failed to comply with a notice issued pursuant to Sub-Clause 37.4 or an instruction issued pursuant to Sub-Clause 39.1 within 28 days after having received, it, or (d) despite previous warning from the Engineer, in writing, is otherwise persistently or flagrantly neglecting to comply with any of his obligations under the Contract,
or (e) has contravened Sub-Clause 4.1,
then the Employer may, after giving 14 days' notice to the Contractor, enter upon the Site and the Works and terminate the employment of the Contractor without thereby releasing the Contractor from any of his obligations or liabilities under the Contract, or affecting the rights and authorities conferred on the Employer or the
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Engineer by the Contract, and may himself complete the Works or may employ any other contractor to complete the Works. The Employer or such other contractor may
use for such completion so much of the Contractor's Equipment, Temporary Works and materials as he or they may think proper.
This Sub-Clause defines the events which, under the Conditions, constitute events of default by the Contractor. The Sub-Clause also provides that, if an event of default occurs, the Employer may enter on the Site, terminate the Contractor's employment and thereby become entitled to certain rights as against the Contractor, the Contractor's Equipment, Temporary Works and materials. The Sub-Clause presupposes that if an event of default of the Contractor has occurred and the Employer elects to terminate the Contractor's employment, the Employer will wish to have the Works completed with as little delay as possible. If this is the case it may be useful to clarify that the event of default referred to in this Sub-Clause, subpara (d) i.e., "...persistently or flagrantly neglecting to comply with any of his obligations under the Contract" would include seriously deviating from the programme or from the Specification (or both), or putting the Works seriously at risk. With this type
of event, the Engineer takes the initiative and the Sub-Clause stipulates that he shall, before certifying the event, give the Contractor a "warning" by a written notice. Unlike the third edition, only one "warning" is required by the fourth edition. It is therefore important that the Engineer, in his "warning" explicitly refers to Clause 63 and clearly describes the event which gives rise to the "warning".
The Employer may, after giving fourteen days' notice, enter upon the Site and terminate
the Contractor's employment. This fourteen-day period is not intended to give the Contractor an opportunity to remedy the default, but to permit the Contractor to make the preparations necessary to leave the Site. After terminating the Contractor's employment, the Employer may himself complete the Works or employ another contractor to do so. For this purpose the Employer or such other contractor may use the Contractor's Equipment, Temporary Works and materials.
Valuation 63.2 at Date of Termination
The Engineer shall, as soon as may be practicable after any such entry and termination by the Employer, fix and determine ex parte, or by or after reference to the par-
ties or after such investigation or enquiries as he may think fit to make or institute, and shall certify: (a) what amount (if any) had, at the time of such entry and termination, been reasonably earned by or would reasonably accrue to the Contractor in respect of work then actually done by him under the Contract, and
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(b) the value of any of the said unused or partially used materials, any Contractor's Equipment and any Temporary Works.
After the Employer terminates the Contractor's employment, the Engineer determines the amount (if any) earned by the Contractor in respect of work performed and the
value of any unused or partially used materials, Contractor's Equipment and Temporary Works. The Engineer may make such determination himself (ex parte)
or after hearing the parties to the Contract. The Engineer's determination and resulting certification, establishes the financial position between the two parties as at the time of termination.
Payment after 63.3 Termination
If the Employer terminates the Contractor's employment under this Clause, he shall not be liable to pay to the
Contractor any further amount (including damages) in respect of the Contract until the expiration of the Defects Liability Period and thereafter until the costs of execution, completion and remedying of any defects, damages for delay in completion (if any) and all other expenses incurred by the Employer have been ascertained and the amount thereof certified by the Engineer. The Contractor shall then be entitled to receive only such sum (if any) as the Engineer may certify would have been payable to him upon due completion by him after deducting the said amount. If such amount exceeds the sum which would have been payable to the Contractor on due completion by him, then the Contractor shall, upon demand, pay to the Employer the amount of such excess and it shall be deemed a debt due by the Contractor to the Employer and shall be recoverable accordingly.
If the Employer terminates the Contractor's employment, he is not liable to pay the Contractor any further amounts (including damages) until the expiration of the Defects Liability Period and the certification by the Engineer of the cost of execution and remedying of any defects, damages for delay in completion (if any) and other expenses incurred by the Employer as a result of the Contractor's default.
Assignment 63.4 of Benefit of Agreement
Unless
prohibited by law, the Contractor shall, if so
instructed by the Engineer within 14 days of such entry and termination referred to in Sub Clause 63.1, assign
to the Employer the benefit of any agreement for the supply of any goods or materials or services and/or for the execution of any work for the purposes of the Contract, which the Contractor may have entered into. 146
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The Contractor is obliged, if instructed by the Engineer, to assign to the Employer the benefit of any agreement for the supply of goods, materials or services required for the execution of the Works and/or for the purposes of the Contract.
If the event of default referred to in Sub-Clause 63.1(c) occurs, the Contract provides alternative measures under Clause 39 and (in case of urgency) Clause 64. Furthermore, upon the occurrence of any event of default under Sub-Clause 63.1, in addition to the rights prescribed by the Clause, the Employer may be entitled to other rights and remedies under the law governing the Contract. However, it is unlikely in most cases that the rights and remedies under the law governing the Contract will be more favourable to the Employer than those provided for in Clause 63.
Urgent 641 Remedial Work
If, by reason of any accident, or failure, or other event occurring to, in, or in connection with the Works, or any
part thereof, either during the execution of the Works, or during the Defects Liability Period, any remedial or other work is, in the opinion of the Engineer, urgently necessary for the safety of the Works and the Contractor is unable or unwilling at once to do such work, the Employer shall be entitled to employ and pay other persons to carry out such work as the Engineer may consider necessary. If the work or repair so done by the Employer is work which, in the opinion of the Engineer,
the Contractor was liable to do at his own cost under the Contract, then all costs consequent thereon or incidental thereto shall, after due consultation with the Employer and the Contractor, be determined by the Engineer and shall be recoverable from the Contractor by the Employer, and may be deducted by the Employer from any monies due or to become due to the Contractor and the Engineer shall notify the Contractor accordingly, with a copy to the Employer. Provided that the Engineer shall, as soon after the occurence of any such emergency as may be reasonably practicable, notify the Contractor thereof
If, during the execution of the Works or during the Defects Liability Period, the Engineer finds that repair work is urgently necessary for the safety of the Works, and the Contractor does not comply with an instruction to carry out the work at once, Sub-Clause
64.1 empowers the Employer to engage others to carry out such work. If, in the opinion of the Engineer, the Contractor was liable to do such work at his own cost under the Contract, then the costs thereof are recoverable from the Contractor. Other Clauses that may be relevant to urgent repair work include Sub-Clauses 20.1, 39.2
and, for the Defects Liability Period, Sub-Clauses 49.4 and 50.1. Sub-Clause 40.1 dealing with suspension might also have some relevance.
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SPECIAL RISKS Although the Contractor is responsible for the care of the Works until the date of issue
of the Taking-Over Certificate there are certain risks for which he is not responsible which are now referred to as Employer's Risks (see Sub-Clause 20.4). Risks listed under sub-paragraphs a,b,c,d and e of Sub-Clause 20.4 are included under the definition of Special Risks in Sub-Clause 65.2 with the exception that the Employer is not responsible for the risks covered by Sub-Clause 20.4 (b) - 'rebellion, revolution, insurrection, or military or usurped power, or civil war' outside the country in which the Works are
being constructed. The reason for this is that the Employer should be able to assess such risks in the country where the Works are to be constructed but it would be unreasonable for the Employer to bear such risks in the country of the Contractor or countries through which, for example, the Contractor may have elected to transport Temporary Works, Contractor's Equipment, Plant and materials as well as staff and labour.
No Liability 65.1 for Special
Risks
The Contractor shall be under no liability whatsoever
in consequence of any of the special risks referred to Sub-Clause 65.2, whether by way of indemnity or otherwise, for or in respect of: (a) destruction of or damage to the Works, save to work condemned under the provisions of Clause 39 prior to the occurrence of any of the said special risks, or (b) destruction of or damage to property, whether of the Employer or third parties, or
(c) injury or loss of life. This Sub-Clause states clearly that the Contractor is not responsible for the consequences of special risks in respect of certain designated events.
Special Risks 65.2
The
special risks are:
(a) the risks defined under paragraphs (a), (c), (d) and (e) of Sub-Clause 20.4, and (b) the risks defined under paragraph (b) of Sub-Clause 20.4 insofar as these relate to the country in which the Works are to be executed.
This Sub-Clause defines the special risks.
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Damage to 65.3 Works by Special Risks
If the Works or any materials or Plant on or near or in
transit to the Site, or any of the Contractor's Equipment, sustain destruction or damage by reason of any of the
said special risks, the Contractor shall be entitled to payment in accordance with the Contract for any Permanent Works duly executed and for any materials or Plant so destroyed or damaged and, so far as may be required by the Engineer or as may be necessary for the completion of the Works, to payment for: (a) rectifying any such destruction or damage to the Works, and
(b) replacing or rectifying such materials or Contractor's Equipment
and the Engineer shall determine an addition to the Contract Price in accordance with Clause 52 (which shall in the case of the cost of replacement of Contractor's Equipment include the fair market value thereof as determined by the Engineer) and shall notify the Contractor accordingly, with a copy to the Employer.
The manner in which the Contractor will be compensated for any loss or damage sustained as a result of special risks is set out here.
Projectile, 65.4 Missile
Destruction, damage, injury or loss of life caused by the explosion or impact, whenever and wherever occurring,
of any mine, bomb, shell, grenade, or other projectile, missile, munition, or explosive of war, shall be deemed to be a consequence of the said special risks. The responsibility under this Sub-Clause differs from the general case in that destruction, damage, injury or loss of life resulting from the impact or explosion of various explosives of war including missiles, mines, bombs, etc., are special risks wherever they occur and the Employer's Risk in relation thereto is not limited to the country in which the Works are being constructed.
Increased 65.5 Costs arising from Special
Risks
Save to the extent that the Contractor is entitled to payment under any other provision of the Contract, the
Employer shall repay to the Contractor any costs of the execution of the Works (other than such as may be attributable to the cost of reconstructing work condemned
under the provisions of Clause 39 prior to the occurrence of any special risk) which are howsoever attributable to or consequent on or the result of or in any way whatsoever connected with the said special risks, subject however to the provisions in this Clause hereinaf-
ter contained in regard to outbreak of war, but the Contractor shall, as soon as any such cost comes to his knowledge, forthwith notify the Engineer thereof. The © FIDIC 1989
149
Engineer shall, after due consultation with the Employer and the Contractor, determine the amount of the Con-
tractor's costs in respect thereof which shall be added to the Contract Price and shall notify the Contractor accordingly, with a copy to the Employer.
This Sub-Clause deals with compensation of the Contractor by the Employer for costs of executing the Works as the result of a Special Risk.
Outbreak of 65.6 War
If, during the currency of the Contract, there is an outbreak of war, whether war is declared or not, in any part of the world which, whether financially or otherwise, materially affects the execution of the Works, the Contractor shall, unless and until the Contract is terminated under the provisions of this Clause, continue to use his best endeavours to complete the execution of the Works. Provided that the Employer shall be entitled, at any time after such outbreak of war, to terminate the Contract by giving notice to the Contractor and, upon such notice being given, the Contract shall, except as to the rights of the parties under this Clause and to the operation of Clause 67, terminate, but without prejudice to the rights of either party in respect of any antecedent breach thereof.
This Sub-Clause sets out the responsibilities of the parties in the event that a war, whether declared or not, materially affects the execution of the Contract.
Removal of 65.7 Contractor's Equipment on Termination
If the Contract is terminated under the provisions of Sub-Clause 65.6, the Contractor shall, with all reasonable dispatch, remove from the Site all Contractor's Equipment and shall give similar facilities to his Sub-
contractors to do so.
If war causes the termination of the Contract the Contractor will wish, if it is possible, to remove his Contractor's Equipment, etc., from the Site. This Sub-Clause obliges him to do so and requires him to give the same facilities to his Subcontractors.
Payment if 65.8 Contract Terminated
If the Contract is terminated as aforesaid, the Contrac-
tor shall be paid by the Employer, insofar as such amounts or items have not already been covered by payments on account made to the Contractor, for all work executed prior to the date of termination at the rates and prices provided in the Contract and in addition.
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(a) The amounts payable in respect of any preliminary items referred to in the Bill of Quantities, so far as the work or service comprised therein has been carried out or performed, and a proper proportion of any such items which have been partially carried out or performed.
(b) The cost of materials, Plant or goods reasonably
ordered for the Works which have been delivered to the Contractor or of which the Contractor is legally liable
to accept delivery, such materials, Plant or goods becoming the properly of the Employer upon such payments being made by him. (c) A sum being the amount of any expenditure reasona-
bly incurred by the Contractor in the expectation of completing the whole of the Works insofar as such expenditure has not been covered by any other payments referred to in this Sub-Clause.
(d) Any additional sum payable under the provisions of Sub-Clauses 65.3 and 65.5.
(e) Such proportion of the cost as may be reasonable, taking into account payments made or to be made for work executed, of removal of Contractor's Equipment under Sub-Clause 65.7 and, f required by the Contractor, return thereof to the Contractor's main plant yard in his country of registration or to other destination, at no greater cost.
(f) The reasonable cost of repatriation of all the Contractor's staff and workmen employed on or in connection with the Works at the time of such termination. Provided that against any payment due from the Employer under this Sub-Clause, the Employer shall be entitled to be credited with any outstanding balances due from the Contractor for advances in respect of Contractor's Equipment, materials and Plant and any other sums which, at the date of termination, were recoverable by the Employer from the Contractor under the terms of the Contract. Any sums payable under this Sub-Clause shall, after due consultation with the Employer and the
Contractor, be determined by the Engineer who shall notify the Contractor accordingly, with a copy to the Employer.
This Sub-Clause sets out the entitlement of the Contractor in the event that the Contract is terminated as the result of special risks.
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RELEASE FROM PERFORMANCE
Payment in 66.1
Event of Release from Performance
If any circumstance outside the control of both parties
arises after the issue of the Letter of Acceptance which renders it impossible or unlawful for either party to fulfil his contractual obligations, or under the law governing
the Contract the parties are released from further performance, then the sum payable by the Employer to the Contractor in respect of the work executed shall be the
same as that which would have been payable under Clause 65 if the Contract had been terminated under the provisions of Clause 65.
This Sub-Clause deals with any situation which makes it impossible or unlawful for one or both parties to meet their obligations under the Contract because of circumstances
which are beyond the control of both parties or where under the law governing the Contract the parties are released from further performance. This concept is very similar to the force majeure (exemption) clause of the International Chamber of Commerce (ICC) publication No. 421. The party claiming release from performance is required to prove the effect of the impediment on the performance of his contractual obligations. The Clause can be invoked by either of the parties whereas, under Sub-Clause 65.6, termination can only be invoked by the Employer. It should be observed that the effect of this Sub-Clause is different from that of the usual force majeure clause. Under the usual force majeure clause, upon the occurrence of an event of force majeure each party is released from further performance and, consequently, bears its own losses. Here, upon the occurrence of circumstances which prevent performance, though the parties are released from further performance, the Contractor is
entitled to payment on the basis provided for in Clause 65. If and when the circumstances which prevent performance should cease, the parties may enter into a new contract. Other Clauses in the FIDIC Conditions which refer to preventing impediments are: Clause 40 - Suspension, in particular Sub-Clause 40.3, Clause 13 referring to physical impossibility and Clause 20 dealing with Care of the Works and Employer's Risks.
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SETTLEMENT OF DISPUTES Although this Clause is generally referred to as the arbitration clause it has a far wider
impact. It provides mechanisms for resolving disputes between the parties as well as including provisions for the dispute or disputes to be referred to arbitration as a last resort. An important factor to note is that by this Clause the parties waive their rights to submit disputes related to the Contract to any other legal means of dispute resolution, in particular to any public court which might have jurisdiction over the dispute.
It also contains an agreement between the parties to take two steps before entering into arbitration viz., first to submit the dispute to the Engineer for his decision and, second, if such decision is not acceptable, to attempt to settle the dispute amicably between themselves. However, arbitration may be commenced 56 days (or as otherwise agreed between the parties) after a notification to that effect, whether or not the second step has been taken. A second step was not included in previous editions and its insertion draws the attention of the parties to a means of avoiding costly arbitration proceedings which consume both time and effort. The new provisions can possibly open up that avenue for a party who could not otherwise be allowed by regulations to enter into discussions to achieve amicable settlement.
Another innovation in the fourth edition is to be found in Sub-Clause 67.4. Under this Sub-Clause, either party may, if the other has failed to comply with a final and binding decision of the Engineer, refer such failure to arbitration. The intention of so doing would be to have the decision made an arbitral award and thereby enforceable under international conventions. It has been contended in the past by some commentators on the FIDIC Conditions that the Engineer who is retained and paid by the Employer should not undertake a quasiarbitral role. This comment has often stemmed from a misunderstanding of what the Conditions state. In the third edition the Engineer's decision was not binding upon the parties and it is not binding in the fourth edition, if either party challenges it in accordance with the procedure laid down in Clause 67.
Engineer's 67.1 Decision
If a dispute of any kind whatsoever arises between the Employer and the Contractor in connection with, or
arising out of, the Contract or the execution of the
Works, whether during the execution of the Works or after their completion and whether before or after repudiation or other termination of the Contract, including any dispute as to any opinion, instruction, determi-
nation, certificate or valuation of the Engineer, the
matter in dispute shall, in the first place, be referred in writing to the Engineer, with a copy to the other party. Such reference shall state that it is made pursuant to this Clause. No later than the eighty-fourth day after the day on which he received such reference the Engineer shall
give notice of his decision to the Employer and the Contractor. Such decision shall state that it is made pursuant to this Clause. Unless the Contract has already been repudiated or terminated, the Contractor shall, in every case, continue to proceed with the Works with all due diligence and the Contractor and the Employer shall give effect forthwith to every such decision of the Engineer unless and until ©FIDIC 1989
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the same shall be revised, as hereinafter provided, in an amicable settlement or an arbitral award.
If either the Employer or the Contractor be dissatisfied with any decision of the Engineer, or if the Engineer
fails to give notice of his decision on or before the eighty-fourth day after the day on which he received the
reference, then either the Employer or the Contractor may, on or before the seventieth day after the day on which he received notice of such decision, or on or before the seventieth day after the day on which the said
period of 84 days expired, as the case may be, give
notice to the other party, with a copy for information to the Engineer, of his intention to commence arbitration, as hereinafter provided, as to the matter in dispute. Such notice shall establish the entitlement of the party giving the same to commence arbitration, as hereinafter pro-
vided, as to such dispute and, subject to Sub-Clause 67.4, no arbitration in respect thereof may be commenced unless such notice is given.
If the Engineer has given notice of his decision as to a matter in dispute to the Employer and the Contractor and no notice of intention to commence arbitration as to such dispute has been given by either the Employer or the Contractor on or before the seventieth day after the day on which the parties received notice as to such
decision from the Engineer, the said decision shall become final and binding upon the Employer and the Contractor. The term 'decision', in the FIDIC Conditions, has been reserved for use in Clause 67. If there is a difference of opinion between the parties to the Contract that is, between the Employer and the Contractor, it is probable that such difference of opinion will have
arisen as the result of an instruction given by the Engineer. If the matter cannot be clarified to the satisfaction of both parties, either may in the first instance refer the dispute to the Engineer for a decision, stating that reference is made under Clause 67.
Any such reference to the Engineer must be copied to the other party. In this respect, it should be noted that generally when the reference of a dispute is made to the Engineer, under Clause 67, it is dealt with by a senior person in the Engineer's firm, and preferably one who has not been involved in the day to day administration of the Contract. The Engineer's decision which is given under Clause 67 for settlement of the dispute will not be final and binding upon either of the two parties if one of the parties disagrees with it and gives notice within 70 days of an intention to commence arbitration. This is a shorter period for challenging a decision than in the third edition where the period was 90 days. The action necessary to prevent a decision from becoming final and binding is a notification by one party (no longer to the Engineer) to the other party of his intention to commence arbitration as to the subject matter of the decision. The notification shall be copied to the Engineer for information but the legal effect lies in the notice to the other party, which establishes the entitlement of the party giving the notification to arbitrate the matter in dispute. 154
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This Clause does not make any exception as to the reference to the Engineer for his decision on matters in dispute having mainly a legal character. It has been argued that, with respect to disputes having mainly a legal character, the Engineer could always refrain from giving a decision. More in line with the intention of the Clause would be that the Engineer gives his decision after having taken legal advice on the matter in dispute.
Amicable 67.2 Settlement
Where notice of intention to commence arbitration as to a dispute has been given in accordance with Sub-Clause
67.1, arbitration of such dispute shall not be commenced unless an attempt has first been made by the parties to settle such dispute amicably. Provided that, unless the parties otherwise agree, arbitration may be commenced
on or after the fifty-sixth day after the day on which notice of intention to commence arbitration of such dispute was given, whether or not any attempt at amicable settlement thereof has been made. If the parties can discuss and agree upon a solution to a matter in dispute between them this will have many advantages over going to arbitration. However, in some countries it has been maintained that if there is no reference to amicable settlement in the Contract then the individual responsible for administering the Contract may have no right to enter into negotiations for an amicable settlement. This Sub-Clause makes provision for this possibility but sets a time limit so that the settlement discussions will not be prolonged indefinitely. Whether or not an attempt at amicable settlement has been made within 56 days, the parties can thereafter proceed with arbitration. The parties may consider it to be advantageous to agree to a procedure for amicable settlement at an early stage in the Contract before any dispute arises.
The amicable settlement is essentially a process to be left to the Employer and the Contractor. Of course, assistance may be called for from the Engineer, where appropriate.
Arbitration 67,3
Any dispute in respect of which: (a) the decision, f any, of the Engineer has not become
final and binding pursuant to Sub-Clause 67.1, and (b) amicable settlement has not been reached within the period stated in Sub-Clause 67.2 shall be finally settled, unless otherwise specified in the Contract, under the Rules of Conciliation and Arbitration of the International Chamber of Commerce by one or more arbitrators appointed under such Rules. The said arbitrator/s shall have full power to open up, review and revise any decision, opinion, instruction, determination, certificate or valuation of the Engineer related to the dispute. Neither party shall be limited in the proceedings before such arbitrator/s to the evidence or arguments put before the Engineer for the purpose of obtaining his said decision pursuant to Sub-Clause 67.1. No such decision shall disqualify the Engineer from being called as a witness and giving evidence before the arbitrator/s on any matter whatsoever relevant to the dispute. ©FIDIC 1989
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Arbitration may be commenced prior to or after completion of the Works, provided that the obligations of the Employer, the Engineer and the Contractor shall not be
altered by reason of the arbitration being conducted during the progress of the Works. Arbitration proper may be commenced any time prior to completion of the Works or after
such completion provided that the parties have first attempted to settle the dispute amicably (Sub-Clause 67.2) but not succeeded or the stipulated time period for amicable settlement has elapsed. In selecting the place of arbitration the parties should consider, among other things, the neutrality of the location, the suitability of local law and the administration services available. If no place of arbitration is stipulated then, under the Rules of Arbitration of the International Chamber of Commerce (ICC), the place would be chosen by the ICC Court of Arbitration.
The Sub-Clause provides that if no alternative system of arbitration is stated in Part II then any arbitration will be under the ICC arbitration rules. If consideration is given to replacing these rules by any other it should be borne in mind that the ICC Court of
Arbitration in Paris has functioned for more than 60 years in the administration of arbitration and that arbitrators and legal counsel in a great number of countries throughout the world have experience of this system.
However, there are other organisations, such as UNCITRAL, which have issued rules for dealing with disputes under international contracts. Where it is decided that a settlement of dispute procedure, other than that of the ICC, should be used, the Sub-Clause may be varied in Part II. The following is an example text:
Arbitration 67.3
Following paragraph (b), delete the words 'shall be finally settled ... International Chamber of Commerce'
and substitute 'shall be finally settled under UNCITRAL Arbitration Rules as administered by (insert name of administering authority)'. Where an alternative to the ICC procedure is selected, care should be taken to establish
that the alternative is appropriate for the circumstances of the Contract and that the wording of Clause 67 is checked and amended as may be necessary to avoid any ambiguity with the alternative.
Failure to 67.4 Comply with Engineer's Decision
Where neither the Employer nor the Contractor has given notice of intention to commence arbitration of a dispute within the period stated in Sub-Clause 67.1 and the related decision has become final and binding, ei-
ther party may, if the other party fails to comply with such decision, and without prejudice to any other rights it may have, refer the failure to arbitration in accordance with Sub-Clause 67.3. The provisions of SubClauses 67.1 and 67.2 shall not apply to any such reference.
It may happen that a party who has not disputed an Engineer's decision subsequently fails to comply with it. This Sub-Clause affords the opportunity for the other party to refer such failure to arbitration for the purposes of obtaining an arbitration award that may be enforced internationally. 156
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NOTICES
Notice to 68.1 Contractor
All certificates, notices or instructions to be given to the Contractor by the Employer or the Engineer under the
terms of the Contract shall be sent by post, cable, telex or facsimile transmission to or left at the Contractor's principal place of business or such other address as the Contractor shall nominate for that purpose.
Notice to 68.2 Employer
and Engineer
Any notice to be given to the Employer or the Engineer under the terms of the Contract shall be sent by post, cable, telex or facsimile transmission to or left at the
respective addresses nominated for that purpose in Part II of these Conditions.
Change of 68.3 A dress
Either party may change a nominated address to another address in the country where the Works are being executed by prior notice to the other party, with a copy
to the Engineer, and the Engineer may do so by prior notice to both parties. This Clause deals with communications of various kinds between the parties and with the Engineer. Formal notices are required by the Contract in different situations: to the Contractor, for example, in Sub-Clause 41.1 (Commencement of Works), Sub-Clause 52.2 (Power of Engineer to Fix Rates), Sub-Clause 63.1 (Default of Contractor), Sub-Clause 65.6 (Outbreak of War) and Clause 67 (Settlement of Disputes); to the Employer, for example, in Clause 67 (Settlement of Disputes) and in Sub-Clause 69.4 (Contractor's Entitlement to Suspend Work); and to the Engineer, for example, in Sub-Clause 6.3 (Disruption of Progress), Sub-Clause 12.2 (Adverse Physical Obstructions or Conditions), Sub-Clause 52.2 (Power of Engineer to Fix Rates), Sub-Clause 53.1 (Notice of Claims), etc.
It is important that any such notice complies with the Clause being relied upon and be sent to the address nominated for such receipt. For the Contractor, the address would be
its principal place of business (the head office). Later, during the execution of the Contract, this might be changed to an office near the location of the Employer (but not necessarily the Site office). The Contract requires numerous other types of communications such as certificates and instructions and each party should establish at an early stage appropriate procedures for sending and receiving these.
The following entry is required to be included in Part II:
Notice to 68.2 Employer
Engineer
For the purposes of this Sub-Clause the respective addresses are:
(a)
The Employer (insert address)
(b) The Engineer (insert address)
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DEFAULT OF EMPLOYER 69 emphasises the importance of an uninterrupted flow to the Contractor of payments to which he is entitled. Clause
Default of 69.1 Employer
In the event of the Employer: (a) failing to pay to the Contractor the amount due
under any certificate of the Engineer within 28 days after the expiry of the time stated in Sub-Clause 60.10 within which payment is to be made, subject to any deduction that the Employer is entitled to make under the Contract, or (b) interfering with or obstructing or refusing any required approval to the issue of any such certificate, or (c) becoming bankrupt or, being a company, going into liquidation, other than for the purpose of a scheme of reconstruction or amalgamation, or
(d) giving notice to the Contractor that for unforeseen reasons, due to economic dislocation, it is impossible for him to continue to meet his contractual obligations
the Contractor shall be entitled to terminate his employ-
ment under the Contract by giving notice to the Employer, with a copy to the Engineer. Such termination shall take effect 14 days after the giving of the notice. This Sub-Clause lists in (a) to (d) the reasons (all of which relate to the Employer's ability
to make payment to the Contractor) for which the Contractor can, by giving notice to the Employer, terminate his employment under the Contract. The termination takes effect automatically 14 days after such notice is given to the Employer. The parties are of course free to negotiate the Contractor's return to work during or after
the period of notice, but resumption of work is not automatic, even if the default is rectified during the period of notice. It should be emphasised that the termination of a contract is an important legal matter, and that, in addition to the terms of the Contract, the law governing the Contract should be examined to ascertain the effects thereof on the parties.
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If the Employer is a government or public authority, it may be appropriate to delete case (c) by a supplement to Sub-Clause 69.1 in Part II. In addition, the law governing the Contract may contain mandatory provisions the effect of which is to make amendments to the Clause desirable. The following are examples of what it may be necessary to add in Part II:
Where the Employer is a government it may be considered appropriate to vary the SubClause:
Default 69.1 of the Employer
Delete paragraph (c) and renumber paragraph (d) as (c).
Where the terms of the Sub-Clause, when read in conjunction with Sub-Clause 69.3,
are in conflict with the law governing the Contract, the Sub-Clause may need to be varied as follows:
Default 69.1 of the Employer
Removal of 69.2
Contractor's Equipment
Delete 'or' at the end of paragraph (c) and delete para-
graph(d).
Upon the expiry of the 14 days' notice referred to in Sub-Clause 69.1, the Contractor shall, notwithstanding the provisions of Sub-Clause 54.1, with all reasonable
despatch, remove from the Site all Contractor's Equipment brought by him thereon.
Upon such termination the Contractor is obliged to remove his Equipment from the Site.
Payment on 69.3 Termination
in the event of such termination the Employer shall be under the same obligations to the Contractor in regard to payment as if the Contract has been terminated under
the provisions of Clause 65, but, in addition to the payments specified in Sub-Clause 65.8, the Employer shall pay to the Contractor the amount of any loss or damage to the Contractor arising out of or in connection with or by consequence of such termination. The Employer is obliged to make payment to the Contractor as stipulated in Sub-Clause 69.3 which, in addition to the payment for termination under Clause 65, could include compensation for the Contractor's loss of profit.
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Contractor's 694 Without prejudice to the Contractor's entitlement to interest under Sub-Clause 60.10 and to terminate under Entitlement to
Suspend Work
Sub-Clause 69.1, the Contractor may, if the Employer fails to pay the Contractor the amount due under any certificate of the Engineer within 28 days after the expiry of the time stated in Sub-Clause 60.10 within
which payment is to be made, subject to any deduction that the Employer is entitled to make under the Contract, after giving 28 days' prior notice to the Employer, with a copy to the Engineer, suspend work or reduce the rate of work. If the Contractor suspends work or reduces the rate of
work in accordance with the provisions of this SubClause and thereby suffers delay or incurs cost the Engineer shall, after due consultation with the Employer and the Contractor, determine (a) any extension of time to which the Contractor is entitled under Clause 44, and
(b) the amount of such costs, which shall be added to the Contract Price, and shall notify the Contractor accordingly, with a copy to the Employer.
Clause 69 in the fourth edition has been supplemented with an additional, but less severe, remedy for the Contractor, if the Employer fails to pay any certificate promptly, which may be suitable where both parties in reality wish to complete the Contract. The Contractor can give notice to the Employer under Sub-Clause 69.4 which entitles the Contractor, after a period of 28 days, to suspend work or reduce the rate of such work. Such suspension could involve anything from stopping all production (maintaining only safety work to protect the Site and work already done) to a nominal reduction in work to demonstrate the Contractor's dissatisfaction, all at the Contractor's discretion. He thus has the possibility to resume normal work when the cause for his action has been removed, and he is entitled to obtain compensation for any delay (time extension) and for his extra costs.
Resumption 695 Where the Contractor suspends work or reduces the rate of Work of work, having given notice in accordance with Sub-
Clause 69.4, and the Employer subsequently pays the amount due, including interest pursuant to Sub-Clause 60.10, the Contractor's entitlement under Sub-Clause 69.1 shall, if notice of termination has not been given, lapse and the Contractor shall resume normal working as soon as is reasonably possible.
This Sub-Clause deals with the resumption of work.
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CHANGES IN COST AND LEGISLATION
Increase or 70.1
Decrease
There shall be added to or deducted from the Contract
Price such sums in respect of rise or fall in the cost of labour and/or materials or any other matters affecting the cost of the execution of the Works as may be deter-
of Cost
mined in accordance with Part II of these Conditions.
Subsequent 70.2 Legislation
If, after the date 28 days prior to the latest date for submission of tenders for the Contract there occur in the
country in which the Works are being or are to be executed changes to any National or State Statute, Ordinance, Decree or other Law or any regulation or bye-law of any local or other duly constituted authority, or the introduction of any such State Statute, Ordinance, Decree, Law, regulation or bye-law which causes additional or reduced cost to the Contractor, other than under Sub-Clause 70.1, in the execution of the Contract, such additional or reduced cost shall, after due consultation with the Employer and the Contractor, be deter-
mined by the Engineer and shall be added to or de-
ducted from the Contract Price and the Engineer shall notify the Contractor accordingly, with a copy to the Employer.
Particularly in periods of inflation and of instability in currency exchange rates, the Employer should not, in his own best interests, and especially on long-tenn contracts, ask tenderers to quote firm prices with no provision for adjustments, at least in the country in which the Works are to be executed. If contractors do not have to allow for price variations when preparing their tenders, the Employer will receive better and more competitive offers from reputable contractors, and will only have to meet such net variations in cost as actually occur.
Clause 70 is intended to make provision for the possible effect of such matters as variation in the cost of labour and materials arising during the execution of the Works and of new or amended national and local laws and regulations introduced during or after the final stages of the preparation of the tenders. Ideally, the net increase (or decrease) in the cost of labour and materials, consumables, etc., arising after a date when tenderers can be assumed to have completed the computation of the rates and prices inserted in their tenders, should be assessed and the Contract Price adjusted accordingly. Where such variation can be checked from official
information, the task is comparatively easy. In many cases such information is not available and alternative methods must be devised.
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The wording of Clause 70 in Part I cannot, therefore, be too specific and must allow for
individual drafting to suit particular local conditions. Guidance for such individual drafting is given below.
For contracts of short duration, e.g., one year at maximum, it may be reasonable to require firm prices. The following Part II entries will probably be appropriate:
Increase or
70.1
Decrease in Cost
Delete the text of the Sub-Clause and substitute: Subject to Sub-Clause 70.2 the Contract Price shall not be
subject to any adjustment in price in respect of rise
or fall in the cost of labour, materials or any other matters affecting the cost of execution of the Contract.
Subsequent
70.2
Delete the words 'other than under Sub-Clause 70.1'
Legislation
For contracts of longer duration, adjustments of prices should be allowed. Two
methods are given below, the first adjustment based upon 'basic prices' and the second based upon 'indices'.
Of these two methods the one based on 'indices' is recommended wherever suitable indices can be obtained. It is easier to administer and enables the Contractor who purchases skillfully to be rewarded. The following Part II entry should be made where price adjustment is to be made by establishing the difference in cost between basic price and the current price of local labour and specified materials:
Increase or Decrease in Cost
70.1
Delete the text of the Sub-Clause and substitute:
Adjustments to the Contract Price shall be made in respect
of rise or fall in the cost of local labour and
specified materials as set out in this Sub-Clause. (a) Local Workmen (i) For the purpose of this Sub-Clause:
'Local Workmen' means skilled, semi-skilled and unskilled workmen of all trades engaged by the Con-
tractor on the Site for the purpose of or in connection with the Contract or engaged full time by the Contractor off the Site for the purpose of or in connection with the Contract (by way of illustration but not limitation: workmen engaged full time in any office, store, workshop or quarry).
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'Basic Rate' means the applicable basic minimum wage rate prevailing on the date 28 days prior to the latest date for submission of tenders by reason of any National or State Statute, Ordinance, Decree or other
Law or any regulations or bye-law of any local or other duly constituted authority, or in order to conform with practice amongst good employers generally in the area where the Works are to be carried out.
'Current Rate' means the applicable basic minimum wage rate for Local Workmen prevailing on any date subsequent to the date 28 days prior to the latest date
set for the submission of tenders by reason of any National or State Statute, Ordinance, Decree or other
Law or any regulation or bye-law of any local or other duly constituted authority, or in order to conform with practice amongst good employers generally in the area where the Works are to be carried out.
(ii) The adjustment to the Contract Price under the
terms of this Sub-Clause shall be calculated by multiplying the difference between the Basic and Current Rates for Local Workmen by: (a) the number of hours actually worked, and also
(b) in respect of those hours worked at overtime rates, by the product of the number of said hours and the percentage addition required by the law to be paid by the Contractor for overtime. Such adjustment may be either by an addition to or a deduction from the Contract Price.
(iii) No other adjustment of the Contract Price on account of fluctuation in the remuneration of Local Workmen shall be made. (b) Specified Materials
(i) For the purpose of this Sub-Clause:
'Specified Materials' means the materials stated in Appendix (insert reference) to Tender required on
the Site for the execution and completion of the Works.
'Basic Prices' means the current prices for the specified materials prevailing on the date 28 days prior to the latest date for submission of tenders.
'Current Prices' means the current prices for the specified materials prevailing at any date subsequent
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(ii) The adjustment to the Contract Price under the terms of this Sub-Clause shall be calculated by applying the difference between the Basic and Current Prices to the quantity of the appropriate Specified Materials which is delivered to the Site during the period for which the particular Current Price is effective. Such adjustment may be either an addition to or a deduction from the Contract Price. (iii) The Contractor shall use due diligence to ensure that excessive wastage of Specified Materials shall not occur. Any Specified Materials removed from the Site shall be clearly identified in the records required under paragraph (d) of this Sub-Clause. (iv) The provisions of this Sub-Clause shall apply to fuels used in Contractor's Equipment engaged on the
Site for the purposes of executing the
Works,including vehicles owned by the Contractor (or hired by him under long term arrangements under which the Contractor is obligated to supply fuel) engaged in transporting any staff, labour, Contractor's Equipment, Temporary Works, Plant or materials to and from the Site. Such fuels shall be clearly identified in the records required under paragraph (d)
of this Sub-Clause. The provisions of this Sub-
Clause shall not apply to any fuels sold or supplied to any employee of the Contractor or to any person for use in any motor vehicle not being used for the purposes of the Contract.
(v) The Contractor shall at all times have regard to suitable markets and shall, whenever buying materials a variation in the cost of which would give rise to an adjustment of the Contract Price under this Sub-Clause, be diligent to buy or procure the same at the most economical prices as are consistent with the due performance by the Contractor of his obligations under the Contract. If at any time there shall have been any lack of diligence, default or negligence on the part of the Contractor, whether in observing the above requirements or otherwise, then, for the purposes of adjusting the Contract Price pursuant hereto, no account shall be taken of any increase in cost which may be attributable to such lack of diligence, default or negligence and the amount by which any cost would have been decreased but for such lack of diligence, default or
negligence shall be deducted from the Contract Price.
(vi) No other adjustment to the Contract Price on account of fluctuation in the cost of materials shall be made.
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(c) Overheads and Profits Excluded
In determining the amount of any adjustment to the Contract Price pursuant to this Sub-Clause no account shall be taken of any overheads or profits. (d) Notices and Records •
The Contractor shall forthwith, upon the happening of any event which may or may be likely to give rise to the adjustment of the Contract Price pursuant to this Sub-Clause, give notice thereof to the Engineer and the Contractor shall keep such books, accounts and other documents and records as are necessary to enable adjustment under this Sub-Clause to be made and shall, at the request of the Engineer, furnish any invoices, accounts,
documents or records so kept and such other information as the Engineer may require. (e) Adjustment after Date of Completion
The Contractor shall forthwith, upon the happening of any event which may or may be likely to give rise to the adjustment of the Contract Price pursuant to this Sub-Clause, give notice thereof to the Engineer and the Contractor shall keep such books, accounts and other documents and records as are necessary to enable adjustment under this Sub-Clause to be made and shall, at the request of the Engineer, furnish any invoices, accounts, documents or records so kept and such other information as the Engineer may require. (f) Determination of Adjustment to Contract Price The amount of any adjustment to the Contract Price pursuant to this Sub-Clause shall be determined by the Engineer in accordance with the foregoing rules.
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EXAMPLE APPENDIX TO TENDER for use in connection with the above. SPECIFIED MATERIALS Material
Unit
Price and Location
Transport to Site
Price
Remarks
Delivered to Site
Bitumen
Diesel Petrol Lubricants Cement Reinforcing Steel Explosives
NOTES:
1. The Contractor shall provide copies of quotations to substantiate all prices included in the above table. 2. All subsequent price substantiation shall be from the same source as original unless otherwise agreed by the Engineer. 3. The Contractor shall submit full explanation and provide substantiating documentation for the mode of transport to Site he proposes. Only the proposed documented mode of transport shall qualify for price adjustment.
(Note: Materials stated in the Appendix to Tender should be those of which substantial quantities are involved.) The following Part II entry should be made where price adjustment is to be made through the application of indices in a formula:
Increase
70.1
Delete the text of the Sub-Clause and substitute: (a) Adjustments to the Contract Price in respect of rise
Decrease
fall in the cost of labour and materials and other matters affecting the cost of execution of the Works shall be calculated for each monthly statement pursuant to Sub-Clause 60.1, the Statement at Completion pursuant to Sub-Clause 60.5 and the Final Statement pursuant to Sub-Clause 60.6 in accordance with the provisions of this Sub-Clause if there shall be any and
in Cost
changes in the following index figures compiled by (insert details of source of indices) and published by (insert details of publication): 166
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1989
(i) the Index of the cost of Labour in (insert name of country) (ii) the Index of the cost of (insert other factor, as relevant) (iii) the Index of the cost of (insert other factor, as relevant)
(b) For the purpose of this Sub-Clause:
(i) 'Base Index Figure' shall mean the index figure applicable on the date 28 days prior to the latest date for submission of tenders.
(ii) 'Current Index Figure' shall mean the index figure applicable on the last day of the period to which the particular statement relates.
Provided that in respect of any work the value of which is included in any such monthly statement (or Statement at Completion or Final Statement) and which was executed after the due date (or ex-
tended date) for completion of the whole
Works, pursuant to Clause 43, the Current Index Figure shall be the index figure applicable on the aforesaid due date (or extended date) for completion of the whole of the Works.
(iii) 'Effective Value' shall be the difference between:
(a) The amount which is due to the Contractor under the provisions of Sub-Clauses 60.2, 60.5 or 60.8 (before deducting retention and exclud-
ing repayment of the advance payment) less any amounts for:
work executed under nominated Subcontracts
materials and Plant on the Site, as referred to in Sub-Clause 60.1(c) dayworks, variations or any other items based on actual cost or current prices, and bonuses (if any) adjustments under Clause 70,
and (b) The amount calculated in accordance with (b)(iii)(a) of this Sub-Clause and included in the last preceding statement.
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167
(c) The adjustment to the Contract Price shall
be calculated by multiplying the Effective Value by a Price Fluctuation Factor which shall be the net sum of the products obtained by multiplying each of the proportions given in paragraph (d) of this Sub-Clause by the following fraction:
Current Index Figure - Base Index Figure Base Index Figure calculated using the relevant index figures.
(d) For the purpose of calculating the Price Fluctuation Factor, the proportions referred to in paragraph (c) of this Sub-Clause shall (irrespective of the actual constituents of the work) be as follows:
0.x in respect of labour (and supervision) costs subject to adjustment by reference to the Index referred to in (a)(i) of this SubClause;
0.x in respect of by reference to the Index referred to in (a)(ii) of this Sub-Clause;
0.x in respect of by reference to the Index referred to in (a)(iii) of this Sub-Clause;
0.x in respect of all other costs which shall not be subject to any adjustment; 1.00 Total (e) Where the value of an Index is not known at the time of calculation, the latest available value shall be used and any adjustment neces-
sary shall be made in subsequent monthly statements.
(Note: The number of indices included under (a) of this Sub-Clause may be varied, if it is determined that a different number of factors should be separately identified, and in such case (d) of this Sub-Clause must be altered to be consistent.)
168
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CURRENCY AND RATES OF EXCHANGE
Currency 71.1
Restrictions
If, after the date 28 days prior to the latest date for submission of tenders for the Contract, the Government or authorised agency of the Government of the country in which the Works are being or are to be executed imposes currency restrictions and/or transfer of currency restrictions in relation to the currency or currencies in which the Contract Price is to be paid, the Employer shall reimburse any loss or damage to the Contractor arising therefrom, without prejudice to the right of the Contractor to exercise any other rights or remedies to which he is entitled in such event.
This Clause protects the Contractor against currency restrictions and/or transfer of cur-
rency restrictions in relation to the currencies in which the Contract Price is to be paid. If such restrictions are imposed after the Contractor will normally have priced his tender, the Contractor is entitled to be reimbursed by the Employer for any consequent loss or damage. The Contractor will normally need to transfer funds to the country of the Works during the mobilisation stage and to repatriate the funds later. The Contract may provide for special advance payments by the Employer, for the purchase of Contractor's Equipment and for repayment by the Contractor during the period of the Contract. Payments of retention sums, liquidated damages and bonus may also be affected and so may also the valuation of the Contractor's Equipment for possible tax or customs duty assessment on re-export or sale at the end of the Contract.
It is common for the Contract Price to be paid in one or more foreign currencies in addition to the local currency of the country where the Works are to be executed. Where this is the case, consideration should be given to nominating a place of payment (a bank) in each of the countries of the foreign currencies applicable. See example Sub-Clause under Clause 60.
Rates of 72.1 Exchange
Where the Contract provides for payment in whole or in part to be made to the Contractor in foreign currency
or currencies, such payment shall not be subject to vari-
ations in the rate or rates of exchange between such specified foreign currency or currencies and the currency of the country in which the Works are to be executed.
In this Sub-Clause it is assumed that the Contractor has quoted his tender price as consisting of sums in one or more foreign currencies in addition to a sum to be paid in
the currency of the country where the Works are to be constructed, the local currency. In a unit rate contract, this would normally require that each and every item to be paid for is quoted in one or more foreign currencies in addition to the local currency. Such an arrangement gives a complicated Bill of Quantities but ensures that the Contractor receives the appropriate currencies.
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169
Currency 72,2
Where the Employer has required the Tender to be expressed in a single currency but with payment to be
Proportions
made in more than one currency and the Contractor has stated the proportions or amounts of other currency or currencies in which he requires payment to be made, the rate or rates of exchange applicable for calculating the payment of such proportions or amounts shall, unless otherwise stated in Part II of these Conditions, be those
prevailing, as determined by the Central Bank of the country in which the Works are to be executed, on the date 28 days prior to the latest date for the submission of tenders for the Contract, as has been notified to the Contractor by the Employer prior to the submission of tenders or as provided for in the Tender.
This Sub-Clause deals with the procedure to be followed if tenderers have been required to submit their tenders in a single currency. Full details of requirements will have been issued by the Employer when inviting tenders and during the tendering period. Each payment certificate will then be calculated in such currency based on rates for each payment item in that currency. But for payment, the sum certified will be converted into the various currencies in the proportions required by the Contractor in his tender. The rates of exchange for conversion shall be fixed for the duration of the Contract at the rates communicated to the tenderers by the Employer during the tendering period. The Contractor will thus always receive currencies in the same proportions, which may not always correspond to his actual use of the currencies (the advance payment will have an influence also). However, what he receives should eventually correspond to his requirements, if the Works have not been varied substantially or increases and decreases of various work items have not unbalanced his estimate. The possibility of imbalance can be reduced if the Contractor is required in his tender to stipulate currency proportions for different parts of the Bill of Quantities. If an Intematonal Financing Institution is involved in the financing of the project it would probably insist that the currency requirements relate to the countries from which goods and services are to be obtained.
Where it is decided that the rate or rates of exchange shall be established from a source other than the Central Bank of the country, it may be appropriate to make the following variation to the Sub-Clause in Part II:
Currency 72.2 Proportions
170
Delete the words from 'prevailing.' to the end of the sentence and substitute 'stated in the Appendix to
Tender'.
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Currencies of 72.3
Payment for Provisional Sums
Where the Contract provides for payment in more than one currency, the proportions or amounts to be paid in
foreign currencies in respect of Provisional Sums shall
be determined in accordance with the principles set forth in Sub-Clause 72.1 and 72.2 as and when these
sums are utilised in whole or in part in accordance with the provisions of Clauses 58 and 59.
This Sub-Clause emphasises the need to deal separately and individually with the currency content of Provisional Sums as and when they are used.
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171
POSSIBLE SUPPLEMENTARY CLAUSES Part I contains only the 72 Clauses dealt with above but each individual contract will
almost always need additional clauses drafted specifically to meet the needs of the project covered by the Contract. Such clauses may deal with taxes, duties and dues of various kinds, with particular points of law, e.g., the joint and several liability of members
of a joint venture, with bribery, confidentiality and with restrictions as to the use of funds imposed by a financing institution. These would appear as additional clauses in Part II and examples for the four latter cases are given below.
Protection against bribery.
Where the law applicable to the Contract does not cover bribery it may well be of advantage to add the following clause or a clause of a similar nature:
Bribes
.1
If the Contractor or any of his Sub-contractors, agents or servants offers to give or agrees to offer or give to
any person, any bribe, gift, gratuity or commission as an inducement or reward for doing or forbearing to do any action in relation to the Contract or any other contract with the Employer or for showing or forbearing to show favour or disfavour to any person in relation to the Contract or any other contract with the Employer, then the Employer may enter upon the Site and the Works and terminate the employment of the Contractor and the provisions of Clause 63 hereof shall apply as if such entry and termination had been made pursuant to that Clause.
Confidentiality
Where circumstances require that particular confidentiality is observed, the following clause might be appropriate:
Details
to be
Confidential
.1
The Contractor shall treat the details of the Contract as private and confidential, save in so far as may be necessary for the purposes thereof, and shall not publish or
disclose the same or any particulars thereof in any trade
or technical paper or elsewhere without the previous consent in writing of the Employer or the Engineer. If any dispute arises as to the necessity of any publication or disclosure for the purpose of the Contract the same shall be referred to the Employer whose award shall be final.
172
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Restrictions on Expenditure
Where the Contract is being financed wholly or in part by an International Financing Institution whose Articles require a restriction on the use of the funds provided, the following clause may be added:
Expenditure Restricted
.1
The Contractor shall not make any expenditures for the purpose of the Contract in the territories of any country
which is not a member of (insert name of International Financing Institution) nor shall he make any expenditure
for goods produced in or services supplied from such territories.
Contractor as Joint Venture
In the event that the Contractor is a joint venture it is recommended that consideration be given by the Employer to the inclusion of the following clause:
Joint and Several
Liability
.1
If the Contractor is a joint venture of two or more persons,
all such persons shall be jointly and severally
bound to the Employer for the fulfilment of the terms
of the Contract and shall designate one of such persons to act as leader with authority to bind the joint venture. The composition or the constitution of the joint venture shall not be altered without the prior consent of the Employer.
Special Provision for Duties and Taxes
In regard to local taxes, duties and dues, etc., the Contract may stipulate that no exemption whatsoever shall be allowed, or that the Contractor will not be exempted from any such imposition but reimbursed under the Contract, or that he will be exempted from turnover tax and income tax on the Contract and his expatriate personnel likewise on their income tax while stationed in the country of the Works, but will not be exempted from customs duties, other duties and dues, etc., in order not to disturb the market for products and services in the country of the Works. When the Employer is a government or public authority, even customs duties and similar impositions may, in exceptional cases, be excluded from the Contract Price by specific mention in the Tender documents in order that the funds provided by financing institutions may be directed towards the project only. There are numerous ways of dealing with such arrangements and it is considered that
it would not be helpful to include some of these in this present publication as that may appear to exclude others which would be appropriate. A clause should be drawn to respond precisely to the intentions of the Employer and should be included in the Tender documents.
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F I D I C FEDERATION INTERNATIONALE DES INGENIEURS-CONSEILS
GUIDETOTHE USEOFFIDIC CONDITIONS OF CONTRACT
FOR WORKS OF CIVIL
ENGINEERING CONSTRUCTION PART I GENERAL CONDITIONS WITH FORMS OF TENDER AND AGREEMENT
FOURTH EDITION 1987 Renrinted 1988 with editorial amendments
FOREWORD The terms of the Fourth Edition of the Conditions of Contract for Works of Civil
Engineering Construction have been prepared by the Fédération Internationale des Ingénieurs Conseils (FIDIC) and are recommended for general use for the
purpose of construction of such works where tenders are invited on an international basis. The Conditions, subject to minor modifications, are also suitable for use on domestic contracts. The version in English of the Conditions is considered by FIDIC as the official and authentic text for the purpose of translation.
In the preparation of the Conditions it was recognised that while there are numerous Clauses which will be generally applicable there are some Clauses which must necessarily vary to take account of the circumstances and locality of the Works. The Clauses of general application have been grouped together in this document and are referred to as Part I — General Conditions. They have been
printed in a form which will facilitate their inclusion as printed in the contract documents normally prepared.
The General Conditions are linked with the Conditions of Particular Application, referred to as Part H, by the corresponding numbering of the Clauses, so that Parts I and II together comprise the Conditions governing the rights and obligations of the parties. Part II must be specially drafted to suit each individual Contract.
When dredging and certain types of reclamation work are involved special consideration must be given to Part II. To assist in the preparation of Part II explanatory material and example clauses
are published with the Conditions in a separately bound document entitled "Conditions of Contract for Works of Civil Engineering Construction, Part II — Conditions of Particular Application, with Guidelines for preparation of Part II
Clauses, Fourth Edition".
FIDIC anticipates publishing shortly a new edition of its booklet "Notes on Documents for Civil Engineering Contracts" (1977 reprinted 1979) which will include comments on provisions of the Fourth Edition of the Conditions. Users of the Fourth Edition may find it helpful to refer to the new edition of the Notes. It may also be helpful for users to refer to other FIDIC publications, such as: Tendering Procedure (First Edition 1982) Construction, Insurance and Law (1986)
FIDIC gratefully acknowledges the suggestions and comments it has received during the preparation of this edition from European International Contractors (EIC) as mandatory of Confederation of International Contractors Associations
(CICA) with participation of Associated General Contractors of America (AGC).
CONTENTS PART I: GENERAL CONDITIONS
Definitions and Interpretation 1.1
Detinitions
1.2 Headings and Marginal Notes
1.3 Interpretation 1.4 Singular and Plural 1.5
Notices, Consents, Approvals, Certificates
181
182 182 182 183
and Determinations
Engineer and Engineer's Representative 2.1
Engineer's Duties and Authority
2.2 Engineer's Representative 2.3 Engineer's Authority to Delegate 2.4 Appointment of Assistants 2.5 Instructions in Writing 2.6 Engineer to Act Impartially
183 183 183 183 183 184
Assignment and Subcontracting 3.1
4.1
Assignment of Contract Subcontracting
4.2 Assignment of Subcontractors' Obligations
184 184 184
Contract Documents 5.1
Language/s and Law
5.2 Priority of Contract Documents 6.1 Custody and Supply of Drawings and Documents 6.2 One Copy of Drawings to be Kept on Site 6.3 Disruption of Progress 6.4 Delays and Cost of Delay of Drawings 6.5 Failure by Contractor to Submit Drawings 7.1 Supplementary Drawings and Instructions 7.2 Permanent Works Designed by Contractor 7.3 Responsibility Unaffected by Approval
184 185 185 185 185 185
186 186 186 186
General Obligations 8.1
Contractor's General Responsibilities 8.2 Site Operations and Methods of Construction
9.1 Contract Agreement 10.1 Performance Security 10.2 Period of Validity of Performance Security 10.3 Claims under Performance Security 11.1 Inspection of Site 12.1 Sufficiency of Tender 12.2 Adverse Physical Obstructions or Conditions 13.1 Work to be in Accordance with Contract 14.1 Programme to be Submitted 14.2 Revised Programme 14.3 Cash Flow Estimate to be Submitted 14.4 Contractor not Relieved of Duties or Responsibilities 15.1
Contractor's Superintendence
186 186 i 86 186 187 187 187 187 187 188 188
188 188 188 188
fl,
16.1 Contractor's Employees 16.2 Engineer at Liberty to Object 17.1 Setting-out 18.1 Boreholes and Exploratory Excavation 19.1 Safety, Security and Protection of the Environment 19.2 Employer's Responsibilities
20.1 CareofWorks
20.2 Responsibility to Rectify Loss or Damage 20.3 Loss or Damage Due to Employer's Risks
20.4 Employer's Risks 21.1 Insurance of Works and Contractor's Equipment
21.2 ScopeofCover 21.3 Responsibility for Amounts not Recovered
21.4 Exclusions 22.1
Damage to Persons and Property
22.2 Exceptions 22.3 Indemnity by Employer 23.1 Third Party Insurance (including Employer's Property) 23.2 Minimum Amount of Insurance 23.3 Cross Liabilities 24.1 Accident or Injury to Workmen 24.2 Insurance Against Accident to Workmen 25.1 Evidence and Terms of Insurances 25.2 Adequacy of Insurances 25.3 Remedy on Contractor's Failure to Insure 25.4 Compliance with Policy Conditions 26.1 Compliance with Statutes, Regulations
27.1 Fossils 28.1 Patent Rights 28.2 Royalties 29.1 Interference with Traffic and Adjoining Properties 30.1 Avoidance of Damage to Roads 30.2 Transport of Contractor's Equipment or Temporary Works 30.3 Transport of Materials or Plant
30.4 Waterborne Traffic 31.1 Opportunities for Other Contractors 31 .2 Facilities for Other Contractors 32.1 Contractor to Keep Site Clear 33.1 Clearance of Site on Completion
i 88 188 189 189 189 189 189 190 190
io
191 191
ii
191
ii 192 192 i 92
192 192 192 192 192 192 192
193 193 193 193 193 194 194
194 194 194 194 195 195
Labour 34.1
Engagement of Staff and Labour
35.1 Returns of Labour and Contractor's Equipment
195 195
Materials, Plant and Workmanship 36.1
Quality of Materials, Plant and Workmanship
36.2 Cost of Samples 36.3 Cost of Tests 36.4 Cost of Tests not Provided for 36.5 Engineer's Determination where Tests not Provided for 37.1 Inspection of Operations 37.2 Inspection and Testing 37.3 Dates for Inspection and Testing
195
195 195 196 196 196 196 196
37.4 Rejection 375 Independent Inspection 38.1 Examination of Work before Covering up 38.2 Uncovering and Making Openings 39.1 Removal of Improper Work, Materials or Plant 39.2 De1ault of Contractor in Compliance
Suspension Suspension of Work 40.2 Engineer's Determination following Suspension 40.3 Suspension lasting more than 84 Days 40.1
196 197 197 197 197 197 197 198
198
Commencement and Delays Commencement of Works 42.1 Possession of Site and Access Thereto 42.2 Failure to Give Possession 42.3 Wayleaves and Facilities 43.1 Time for Completion 44.1 Extension of Time for Completion 44.2 Contractor to Provide Notification and Detailed Particulars 44.3 Interim Determination of Extension 45.1 Restriction on Working Hours 41.1
46.1 Rate of Progress 47.1 Liquidated Damages for Delay 47.2 Reduction of Liquidated Damages 48.1 Taking-Over Certificate 48.2 Taking-Over of Sections or Parts 48.3 Substantial Completion of Parts 48.4 Surfaces Requiring Reinstatement
198 198 199 199
199 199 199 200 200 200 200 200 201 201 201 201
Defects Liability Defects Liability Period 49.2 Completion of Outstanding Work and Remedying Defects 49.1
201
49.3 Cost of Remedying Defects 49.4 Contractor's Failure to Carry Out Instructions 50.1 Contractor to Search
202 202 202 202
Alterations. Additions and Omissions 51.1
Variations
51.2 Instructions for Variations 52.1 Valuation of Variations 52.2 Power of Engineer to Fix Rates 52.3 Variations Exceeding 15 percent
52.4 Daywork
Procedure for Claims 53.1
Notice of Claims
53.2 Contemporary Records 53.3 Substantiation of Claims 53.4 Failure to Comply 53.5 Payment of Claims
202 203 203 203 203 204 204 204 205 205 205
Contractor's Equipment, Tern porary Works and Materials 54.1
Contractor's Equipment, Temporary Works and Materials; Exclusive Use for the Works
54.2 Employer not Liable for Damage 54.3 Customs Clearance 54.4 Re-export of Contractor's Equipment 54.5 Conditions of Hire of Contractor's Equipment 54.6 Costs for the Purpose of Clause 63 54.7 Incorporation of Clause in Subcontracts 54.8 Approval of Materials not Implied
205 205 205 205 206 206 206 206
Measurement 55.1
Quantities
56.1 Works to be Measured 57.1 Method of Measurement 57.2 Breakdown of Lump Sum Items
206 206 207 207
Provisional Sums Definition of "Provisional Sum" 58.2 Use of Provisional Sums 58.3 Production of Vouchers 58.1
Nominated Subcontractors Definition of "Nominated Subcontractors" 59.2 Nominated Subcontractors; Objection to Nomination 59.3 Design Requirements to be Expressly Stated 59.4 Payments to Nominated Subcontractors 59.5 Certification of Payments to Nominated Subcontractors 59.1
Certificates and Payment 60.1
Monthly Statements
60.2 Monthly Payments 60.3 Payment of Retention Money 60.4 Correction of Certificates 60.5 Statement at Completion 60.6 Final Statement 60.7 Discharge 60.8 Final Certificate 60.9 Cessation of Employer's Liability 60.10 TimeforPayment 61.1 Approval only by Defects Liability Certificate 62.1 Defects Liability Certificate 62.2 Unfulfilled Obligations
Remedies Default of Contractor 63.2 Valuation at Date of Termination 63.3 Payment after Termination 63.4 Assignment of Benefit of Agreement 64.1 Urgent Remedial Work 63.1
Special Risks 65.1
No Liability for Special Risks
65.2 Special Risks
207 207 207 207 207 208 208 208 209 209 209 210 210 210 210 210 210 211 211 211 211
211
212 212 212 213 213 213
65.3 Damage to Works by Special Risks
65.4 Projectile, Missile 65.5 Increased Costs arising from Special Risks
65.6 Outbreak of War 65.7 Removal of Contractor's Equipment on Termination 65.8 PaymentIf Contract Terminated
213 21 3
214 214 214 214
Release from Performance 66.1
Payment in Event of Release from Performance
215
Settlement of Disputes 67.1
Engineer's Decision
67.2 Amicable Settlement
67.3 Arbitration 67.4 Failure to Comply with Engineer's Decision
215
216 216 216
Notices Notice to Contractor 68.2 Notice to Employer and Engineer 68.3 Change of Address 68.1
216 216 216
Default of Employer 69.1
Default of Employer
69.2 Removal of Contractor's Equipment 69.3 Payment on Termination 69.4 Contractor's Entitlement to Suspend Work 69.5 Resumption of Work
Changes in Cost and Legislation 70.1
Increase or Decrease of Cost
70.2 Subsequent Legislation
217 217
217 217 217 217 218
Currency and Rates of Exchange 71.1
Currency Restrictions
72.1 Rates of Exchange 72.2 Currency Proportions 72.3 Currencies of Payment for Provisional Sums
REFERENCE TO PART II INDEX TENDER AGREEMENT EDITORIAL AMENDMENTS
218
218 218
PART I - GENERAL CONDITIONS Definitions and Interpretation Definitions
1.1
In the Contract (as hereinafter defined) the following words and expressions shall have the meanings hereby assigned to them, except where the context otherwise requires: (a) (i) "Employer" means the person named as such in Part II of these Conditions and the legal successors in title to such person, but not (except with the consent of the Contractor) any assignee of such person. (ii) "Contractor" means the person whose tender has been accepted by the Employer and the legal successors in title to such person, but not (except with the consent of the Employer) any assignee of such person.
(iii) "Subcontractor" means any person named in the Contract as a Subcontractor for a part of the Works or any person to whom a part of the Works has been subcontracted with the consent of the Engineer and the legal successors in title to such person, but not any assignee of any such person.
(iv) "Engineer" means the person appointed by the Employer to act as Engineer for the purposes of the Contract and named as such in Part II of these Conditions. (v) "Engineer's Representative" means a person appointed from time to time by the Engineer under Sub-Clause 2.2. (b) (i) "Contract" means these Conditions (Parts I and II), the Specification, the Drawings, the Bill of Quantities, the Tender, the Letter of Acceptance, the Contract Agreement (if completed) and such further documents as may be expressly incorporated in the Letter of Acceptance or Contract Agreement (if completed).
(ii) "Specification" means the specification of the \'orks included in the Contract and any modification thereof or addition thereto made under Clause 51 or submitted by the Contractor and approved by the Engineer.
(iii) "Drawings" means all drawings, calculations and technical information of a like nature provided by the Engineer to the Contractor under the Contract
and all drawings, calculations, samples, patterns, models, operation and maintenance manuals and other technical information of a like nature submitted by the Contractor and approved by the Engineer.
(iv) "Bill of Quantities" means the priced and completed bill of quantities forming part of the Tender. (v) "Tender" means the Contractor's priced offer to the Employer for the execution and completion of the Works and the remedying of any defects therein in accordance with the provisions of the Contract, as accepted by the Letter of Acceptance. (vi) "Letter of Acceptance" means the formal acceptance by the Employer of the Tender. (vii) "Contract Agreement" means the contract agreement (if any) referred to in Sub-Clause 9.1. (viii) "Appendix to Tender" means the appendix comprised in the form of Tender annexed to these Conditions.
(c) (i) "Commencement Date" means the date upon which the Contractor receives the notice to commence issued by the Engineer pursuant to Clause 41.
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(ii) "Time for Completion" means the time for completing the execution of and passing the Tests on Completion of the Works or any Section or part thereof as stated in the Contract (or as extended under Clause 44) calculated from the Commencement Date.
(d)(i) "Tests on Completion" means the tests specified in the Contract or otherwise agreed by the Engineer and the Contractor which are to be made by the Contractor before the Works or any Section or part thereof are taken over by the Employer. (ii) "Taking-Over Certificate" means a certificate issued pursuant to Clause 48.
(e) (i) "Contract Price" means the sum stated in the Letter of Acceptance as payable to the Contractor for the execution and completion of the Works and the remedying of any defects therein in accordance with the provisions of the Contract. (ii) "Retention Money" means the aggregate of all monies retained by the Employer pursuant to Sub-Clause 60.2(a). (f) (i) "Works" means the Permanent Works and the Temporary Works or either of them as appropriate.
(ii) "Permanent Works" means the permanent works to be executed (including Plant) in accordance with the Contract.
(iii) "Temporary Works" means all temporary works of every kind (other
than Contractor's Equipment) required in or about the execution and completion of the Works and the remedying of any defects therein. (iv) "Plant" means machinery, apparatus and the like intended to form or forming part of the Permanent Works. (v) "Contractor's Equipment" means all appliances and things of whatsoever
nature (other than Temporary Works) required for the execution and completion of the Works and the remedying of any defects therein, but does not include Plant, materials or other things intended to form or forming part of the Permanent Works.
(vi) "Section" means a part of the Works specifically identified in the Contract as a Section. (vii) "Site" means the places provided by the Employer where the Works are to be executed and any other places as may be specifically designated in the Contract as forming part of the Site. (g) (i) "cost" means all expenditure properly incurred or to be incurred, whether on or off the Site, including overhead and other charges properly allocable thereto but does not include any allowance for profit.
(ii) "day" means calendar day. (iii) "foreign currency" means a currency of a country other than that in which the Works are to be located.
(iv) "writing" means any hand-written, type-written, or printed communication, including telex, cable and facsimile transmission.
Headings and Marginal Notes Interpretation Singular and Plural
1.2 The headings and marginal notes in these Conditions shall not be deemed part thereof or be taken into consideration in the interpretation or construction
thereof or of the Contract. 1.3 Words importing persons or parties shall include firms and corporations and any organisation having legal capacity.
1.4 Words importing the singular only also include the plural and vice versa where the context requires.
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Notices,
Consents, Approvals, Certificates and Determinations
1.5 Wherever in the Contract provision is made for the giving or issue of any notice, consent, approval, certificate or determination by any person, unless otherwise specified such notice, consent, approval, certificate or determination shall be in writing and the words "notify", "certify" or "determine" shall be construed accordingly. Any such consent, approval, certificate or determination shall not unreasonably be withheld or delayed.
Engineer and Engineer's Representative Engineer's Duties and
2.1
(a) The Engineer shall carry out the duties specified in the Contract.
(b) The Engineer may exercise the authority specified in or necessarily to be implied from the Contract, provided, however, that if the Engineer is required, under the terms of his appointment by the Employer, to obtain the specific approval of the Employer before exercising any such authority, particulars of such requirements shall be set out in Part II of these Conditions. Provided further that any requisite approval shall be deemed to have been given by the Employer for any such authority exercised by the Engineer.
(c) Except as expressly stated in the Contract, the Engineer shall have no authority to relieve the Contractor of any of his obligations under the Contract.
Engineer's Representative
2.2 The Engineer's Representative shall be appointed by and be responsible to the
Engineer's
2.3 The Engineer may from time to time delegate to the Engineer's Representative any of the duties and authorities vested in the Engineer and he may at any time revoke such delegation. Any such delegation or revocation shall be in writing and shall not take effect until a copy thereof has been delivered to the Employer and the Contractor.
Authority to Delegate
Engineer and shall carry out such duties and exercise such authority as may be
delegated to him by the Engineer under Sub-Clause 2.3.
Any communication given by the Engineer's Representative to the Contractor in accordance with such delegation shall have the same effect as though it had been given by the Engineer. Provided that:
(a) any failure of the Engineer's Representative to disapprove any work, materials or Plant shall not prejudice the authority of the Engineer to disapprove
such work, materials or Plant and to give instructions for the rectification thereof;
(b) if the Contractor questions any communication of the Engineer's Representative he may refer the matter to the Engineer who shall confirm, reverse or vary the contents of such communication.
Appointment of Assistants
2.4 The Engineer or the Engineer's Representative may appoint any number of persons to assist the Engineer's Representative in the carrying out of his duties
under Sub-Clause 2.2. He shall notify to the Contractor the names, duties and scope of authority of such persons. Such assistants shall have no authority to issue any instructions to the Contractor save in so far as such instructions may be
necessary to enable them to carry out their duties and to secure their acceptance of
Instructions in Writing
materials, Plant or workmanship as being in accordance with the Contract, and any instructions given by any of them for those purposes shall be deemed to have been given by the Engineer's Representative. 2.5 Instructions given by the Engineer shall be in writing, provided that if for any reason the Engineer considers it necessary to give any such instruction orally, the Contractor shall comply with such instruction. Confirmation in writing of such oral instruction given by the Engineer, whether before or after the carrying out of the instruction, shall be deemed to be an instruction within the meaning of this Sub-Clause. Provided further that if the Contractor, within 7 days, confirms in
writing to the Engineer any oral instruction of the Engineer and such confirmation is not contradicted in writing within 7 days by the Engineer, it shall be deemed to be an instruction of the Engineer.
© FIDIC 1987
Engineer to Act Impartially
The provisions of this Sub-Clause shall equally apply to instructions given by the Engineer's Representative and any assistants of the Engineer or the Engineer's Representative appointed pursuant to Sub-Clause 2.4. 2.6 Wherever, under the Contract, the Engineer is required to exercise his discretion by:
(a) giving his decision, opinion or consent, or (b) expressing his satisfaction or approval, or (c) determining value, or (d) otherwise taking action which may affect the rights and obligations of the Employer or the Contractor he shall exercise such discretion impartially within the terms of the Contract and having regard to all the circumstances. Any such decision, opinion, consent, expression of satisfaction, or approval, determination of value or action may be opened up, reviewed or revised as provided in Clause 67.
Assignment and Subcontracting Assignment
3.1
Subcontracting
4.1
of Contract
The Contractor shall not, without the prior consent of the Employer (which consent, notwithstanding the provisions of Sub-Clause 1.5, shall be at the sole discretion of the Employer), assign the Contract or any part thereof, or any benefit or interest therein or thereunder, otherwise than by: (a) a charge in favour of the Contractor's bankers of any monies due or to become due under the Contract, or (b) assignment to the Contractor's insurers (in cases where the insurers have discharged the Contractor's loss or liability) of the Contractor's right to obtain relief against any other party liable. The Contractor shall not subcontract the whole of the Works. Except where otherwise provided by the Contract, the Contractor shall not subcontract any part of the Works without the prior consent of the Engineer. Any such consent shall not relieve the Contractor from any liability or obligation under the Contract and he shall be responsible for the acts, defaults and neglects of any Subcontractor, his agents, servants or workmen as fully as if they were the acts, defaults or neglects of the Contractor, his agents, servants or workmen. Provided that the Contractor shall not be required to obtain such consent for:
(a) the provision of labour, or (b) the purchase of materials which are in accordance with the standards specified in the Contract, or (c) the subcontracting of any pan of the Works for which the Subcontractor is named in the Contract.
Assignment of
4.2
Subcontractors' Obligations
In the event of a Subcontractor having undertaken towards the Contractor in respect of
the work executed, or the goods, materials, Plant or services supplied
by such Subcontractor, any continuing obligation extending for a period
exceeding that of the Defects Liability Period under the Contract, the Contractor shall at any time, after the expiration of such Period, assign to the Employer, at the Employer's request and cost, the benefit of such obligation for the unexpired
duration thereof.
Contract Documents Language/s and Law
5.1
There is stated in Part II of these Conditions: (a) the language or languages in which the Contract documents shall be drawn up, and
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(b) the country or state the law of which shall apply to the Contract and according to which the Contract shall be construed.
If the said documents are written in more than one language, the language according to which the Contract shall be construed and interpreted is also stated in Part II of these Conditions, being therein designated the "Ruling Language".
Priority of Contract Documents
5.2 The severaVdocuments forming the Contract are to be taken as mutually explanatory of one another, but in case of ambiguities or discrepancies the same shall be explained and adjusted by the Engineer who shall thereupon issue to the
Contractor instructions thereon and in such event, unless otherwise provided in the Contract, the priority of the documents forming the Contract shall be as follows: (1) The Contract Agreement (if completed); (2) The Letter of Acceptance; (3) The Tender; (4) Part II of these Conditions; (5) Part I of these Conditions; and (6) Any other document forming part of the Contract.
Custody and Supply of Drawings and Documents
6.1 The Drawings shall remain in the sole custody of the Engineer, but two copies thereof shall be provided to the Contractor free of charge. The Contractor shall make at his own cost any further copies required by him. Unless it is strictly necessary for the purposes of the Contract, the Drawings, Specification and other
documents provided by the Employer or the Engineer shall not, without the consent of the Engineer, be used or communicated to a third party by the Contractor. Upon issue of the Defects Liability Certificate, the Contractor shall return to the Engineer all Drawings, Specification and other documents provided under the Contract.
The Contractor shall supply to the Engineer four copies of all Drawings, Specification and other documents submitted by the Contractor and approved by the Engineer in accordance with Clause 7, together with a reproducible copy of any material which cannot be reproduced to an equal standard by photocopying.
In addition the Contractor shall supply such further copies of such Drawings, Specification and other documents as the Engineer may request in writing for the use of the Employer, who shall pay the cost thereof.
One Copy of
Drawings to be Kept on Site Disruption of
Progress
6.2 One copy of the Drawings, provided to or supplied by the Contractor as aforesaid, shall be kept by the Contractor on the Site and the same shall at all reasonable times be available for inspection and use by the Engineer and by any
other person authorised by the Engineer in writing. 6.3 The Contractor shall give notice to the Engineer, with a copy to the Employer, whenever planning or execution of the Works is likely to be delayed or disrupted
unless any further drawing or instruction is issued by the Engineer within a reasonable time. The notice shall include details of the drawing or instruction required and of why and by when it is required and of any delay or disruption likely to be suffered if it is late.
Delays and
Cost of Delay of Drawings
6.4 If, by reason of any failure or inability of the Engineer to issue, within a time reasonable in all the circumstances, any drawing or instruction for which notice has been given by the Contractor in accordance with Sub-Clause 6.3, the
Contractor suffers delay and/or incurs costs then the Engineer shall, after due consultation with the Employer and the Contractor, determine: (a) any extension of time to which the Contractor is entitled under Clause 44, and
(b) the amount of such costs, which shall be added to the Contract Price, and shall notify the Contractor accordingly, with a copy to the Employer.
(ci
FIDIC 1987
Failure by
Contractor to Submit Drawings
Supplementary Drawings and Instructions
Permanent Works Designed by Contractor
6.5 If the failure or inability of the Engineer to issue any drawings or instructions is caused in whole or in part by the failure of the Contractor to submit Drawings,
Specification or other documents which he is required to submit under the
Contract, the Engineer shall take such failure by the Contractor into account when making his determination pursuant to Sub-Clause 6.4. 7.1. The Engineer shall have authority to issue to the Contractor, from time to time, such supplementary Drawings and instructions as shall be necessary for the purpose of the proper and adequate execution and completion of the Works and the remedying of any defects therein. The Contractor shall carry out and be bound by the same. 7.2 Where the Contract expressly provides that part of the Permanent Works shall be designed by the Contractor, he shall submit to the Engineer, for approval: (a) such drawings, specifications, calculations and other information as shall be necessary to satisfy the Engineer as to the suitability and adequacy of that design,
and (b) operation and maintenance manuals together with drawings of the Permanent
Works as completed, in sufficient detail to enable the Employer to operate, maintain, dismantle, reassemble and adjust the Permanent Works incorporating that design. The Works shall not be considered to be completed for the purposes
of taking over in accordance with Clause 48 until such operation and maintenance manuals, together with drawings on completion, have been Responsibility Unaffected by Approval
submitted to and approved by the Engineer. 7.3 Approval by the Engineer, in accordance with Sub-Clause 7.2, shall not relieve the Contractor of any of his responsibilities under the Contract.
General Obligations Contractor's General
Responsibilities
Site Operations and Methods of Construction
Contract Agreement
8.1 The Contractor shall, with due care and diligence, design (to the extent provided
for by the Contract), execute and complete the Works and remedy any defects
therein in accordance with the provisions of the Contract. The Contractor shall
provide all superintendence, labour, materials, Plant, Contractor's Equipment and all other things, whether of a temporary or permanent nature, required in and for such design, execution, completion and remedying of any defects, so far as the necessity for providing the same is specified in or is reasonably to be inferred from the Contract. 8.2 The Contractor shall take full responsibility for the adequacy, stability and safety of all Site operations and methods of construction. Provided that the Contracto shall not be responsible (except as stated hereunder or as may be otherwise agreed) for the design or specification of Permanent Works, or for the design or specification of any Temporary Works not prepared by the Contractor. Where the Contract expressly provides that part of the Permanent Works shall be designed by the Contractor, he shall be fully responsible for that part of such Works, notwithstanding any approval by the Engineer. 9.1 The Contractor shall, if called upon so to do, enter into and execute the Contract Agreement, to be prepared and completed at the cost of the Employer, in the form annexed to these Conditions with such modification as may be necessary.
Performance 10.1 If the Contract requires the Contractor to obtain security for his proper Security
performance of the Contract, he shall obtain and provide to the Employer such security within 28 days after the receipt of the Letter of Acceptance, in the sum stated in the Appendix to Tender. When providing such security to the Employer, the Contractor shall notify the Engineer of so doing. Such security shall be in the
form annexed to these Conditions or in such other form as may be agreed between the Employer and the Contractor. The institution providing such security shall be subject to the approval of the Employer. The cost of complying with the requirements of this Clause shall be borne by the Contractor, unless the Contract otherwise provides.
© FIDIC 1987
Period of 10.2 The performance security shall be valid until the Contractor has executed and Validity of
Performance Security
completed the Works and remedied any defects therein in accordance with the
Contract. No claim shall be made against such security after the issue of the Defects
Liability Certificate in accordance with Sub-Clause 62.1 and such
security shall be returned to the Contractor within 14 days of the issue of the said Defects Liability Certificate.
Claims under 10.3 Prior to making a claim under the performance security the Employer shall, in Performance every case, notify the Contractor stating the nature of the default in respect of which the claim is to be made. Security Inspection 11 .1 The Employer shall have made available to the Contractor, before the submission of Site by the Contractor of the Tender, such data on hydrological and sub-surface
conditions as have been obtained by or on behalf of the Employer from investigations undertaken relevant to the Works but the Contractor shall be responsible for his own interpretation thereof. The Contractor shall be deemed to have inspected and examined the Site and its surroundings and information available in connection therewith and to have satisfied himself (so far as is practicable, having regard to considerations of cost and time) before submitting his Tender, as to: (a) the form and nature thereof, including the sub-surface conditions, (b) the hydrological and climatic conditions, (c) the extent and nature of work and materials necessary for the execution and completion of the Works and the remedying of any defects therein, and (d) the means of access to the Site and the accommodation he may require and, in general, shall be deemed to have obtained all necessary information, subject as above mentioned, as to risks, contingencies and all other circumstances which may influence or affect his Tender.
The Contractor shall be deemed to have based his Tender on the data made available by the Employer and on his own inspection and examination, all as aforementioned.
Sufficiency
of Tender
12.1 The Contractor shall be deemed to have satisfied himself as to the correctness and sufficiency of the Tender and of the rates and prices stated in the Bill of
Quantities, all of which shall, except insofar as it is otherwise provided in the Contract, cover all his obligations under the Contract (including those in respect of the supply of goods, materials, Plant or services or of contingencies for which there is a Provisional Sum) and all matters and things necessary for the proper execution and completion of the Works and the remedying of any defects therein.
Adverse Physical 12.2 If, however, during the execution of the Works the Contractor encounters Obstructions or physical obstructions or physical conditions, other than climatic conditions on Conditions the Site, which obstructions or conditions were, in his opinion, not foreseeable by an experienced contractor, the Contractor shall forthwith give notice thereof to
the Engineer, with a copy to the Employer. On receipt of such notice, the Engineer shall, if in his opinion such obstructions or conditions could not have been reasonably foreseen by an experienced contractor, after due consultation with the Employer and the Contractor, determine: (a) any extension of time to which the Contractor is entitled under Clause 44, and
(b) the amount of any costs which may have been incurred by the Contractor by reason of such obstructions or conditions having been encountered, which shall be added to the Contract Price, and shall notify the Contractor accordingly, with a copy to the Employer. Such determination shall take account of any instruction which the Engineer may issue
to the Contractor in connection therewith, and any proper and reasonable measures acceptable to the Engineer which the Contractor may take in the absence of specific instructions from the Engineer.
© FIDIC 1987
Work to be in
13.1 Unless it is legally or physically impossible, the Contractor shall execute and
Accordance with Contract
Contract to the satisfaction of the Engineer. The Contractor shall comply with
Programme to be Submitted
complete the Works and remedy any defects therein in strict accordance with the
and adhere strictly to the Engineer's instructions on any matter, whether mentioned in the Contract or not, touching or concerning the Works. The Contractor shall take instructions only from the Engineer or, subject to the provisions of Clause 2, from the Engineer's Representative. 14.1 The Contractor shall, within the time stated in Part II of these Conditions after the date of the Letter of Acceptance, submit to the Engineer for his consent a programme, in such form and detail as the Engineer shall reasonably prescribe, for the execution of the Works. The Contractor shall, whenever required by the Engineer, also provide in writing for his information a general description of the
arrangements and methods which the Contractor proposes to adopt for the execution of the Works.
Revised Programme
14.2 If at any time it should appear to the Engineer that the actual progress of the Works does not conform to the programme to which consent has been given
under Sub-Clause 14.1, the Contractor shall produce, at the request of the Engineer, a revised programme showing the modifications to such programme necessary to ensure completion of the Works within the Time for Completion.
Cash Flow 14.3 The Contractor shall, within the time stated in Part II of these Conditions after the date of the Letter of Acceptance, provide to the Engineer for his information Estimate to be a detailed cash flow estimate, in quarterly periods, of all payments to which the Submitted Contractor will be entitled under the Contract and the Contractor shall subsequently supply revised cash flow estimates at quarterly intervals, if required to do so by the Engineer.
Contractor not 14.4 The submission to and consent by the Engineer of such programmes or the Relieved of Duties provision of such general descriptions or cash flow estimates shall not relieve the
Contractor of any of his duties or responsibilities under the Contract. or Responsibilities Contractor's 15.1 The Contractor shall provide all necessary superintendence during the execution of the Works and as long thereafter as the Engineer may consider necessary for Superintendence
the proper fulfilling of the Contractor's obligations under the Contract. The Contractor, or a competent and authorised representative approved of by the Engineer, which approval may at any time be withdrawn, shall give his whole time to the superintendence of the Works. Such authorised representative shall
receive, on behalf of the Contractor, instructions from the Engineer or, subject to the provisions of Clause 2, the Engineer's Representative. If approval of the representative is withdrawn by the Engineer, the Contractor shall, as soon as is practicable, having regard to the requirement of replacing him as hereinafter mentioned, after receiving notice of such withdrawal, remove the representative from the Works and shall not thereafter employ him again on the Works in any capacity and shall -replace him by another representative approved by the Engineer. Contractor's 16.1 The Contractor shall provide on the Site in connection with the execution and completion of the Works and the remedying of any defects therein Employees (a) only such technical assistants as are skilled and experienced in their respective callings and such foremen and leading hands as are competent to give proper superintendence of the Works, and
(b) such skilled, semi-skilled and unskilled labour as is necessary for the proper and timely fulfilling of the Contractor's obligations under the Contract.
Engineer at Liberty to Object
16.2 The Engineer shall be at liberty to object to and require the Contractor to remove forthwith from the Works any person provided by the Contractor who, in the opinion of the Engineer, misconducts himself, or is incompetent or negligent in the proper performance of his duties, or whose presence on Site is otherwise considered by the Engineer to be undesirable, and such person shall not be again allowed upon the Works without the consent of the Engineer. Any person so removed from the Works shall be replaced as soon as possible.
FIDIC 1987
Setting-out 17.1 The Contractor shall be responsible for: (a) the accurate setting-out of the Works in relation to original points, lines and levels of reference given by the Engineer in writing,
(b) the correctness, subject as above mentioned, of the position, levels, dimensions and alignment of all parts of the Works, and
(c) the provision of all necessary instruments, appliances and labour in connection with the foregoing responsibilities.
If, at any time during the execution of the Works, any error appears in the
position, levels, dimensions or alignment of any part of the Works, the Contractor, on being required so to do by the Engineer, shall, at his own cost, rectify such error to the satisfaction of the Engineer, unless such error is based on
incorrect data supplied in writing by the Engineer, in which case the Engineer shall determine an addition to the Contract Price in accordance with Clause 52 and shall notify the Contractor accordingly, with a copy to the Employer. The checking of any setting-out or of any line or level by the Engineer shall not in any way relieve the Contractor of his responsibility for the accuracy thereof and
the Contractor shall carefully protect and preserve all bench-marks, sight-rails, pegs and other things used in setting-out the Works.
Boreholes and 18.1 Exploratory Excavation
If, at any time during the execution of the Works, the Engineer requires the Contractor to make boreholes or to carry out exploratory excavation, such
Safety, Security 19.1 and Protection of the Environment
The Contractor shall, throughout the execution and completion of the Works
requirement shall be the subject of an instruction in accordance with Clause 51,
unless an item o a Provisional Sum in respect of such work is included in the Bill of Quantities. and the remedying of any defects therein: (a) have full regard for the safety of all persons entitled to be upon the Site and
keep the Site (so far as the same is under his control) and the Works (so far as the
same are not completed or occupied by the Employer) in an orderly state appropriate to the avoidance of danger to such persons, and (b) provide and maintain at his own cost all lights, guards, fencing, warning signs and watching, when and where necessary or required by the Engineer or by any duly constituted authority, for the protection of the Works or for the safety and convenience of the public or others, and
(c) take all reasonable steps to protect the environment on and off the Site and to
avoid damage or nuisance to persons or to property of the public or others resulting from pollution, noise or other causes arising as a consequence of his
Employer's 19.2 Responsibilities
methods of operation. If under Clause 31 the Employer shall carry out work on the Site with his own workmen he shall, in respect of such work: (a) have full regard to the safety of all persons entitled to be upon the Site, and (b) keep the Site in an orderly state appropriate to the avoidance of danger to such persons.
If under Clause 31 the Employer shall employ other contractors on the Site he shall require them to have the same regard for safety and avoidance of danger.
Care of Works 20.1
The Contractor shall take full responsibility for the care of the Works and materials and Plant for incorporation therein from the Commencement Date until the date of issue of the Taking-Over Certificate for the whole of the Works,
when the responsibility for the said care shall pass to the Employer. Provided that: (a) if the Engineer issues a Taking-Over Certificate for any Section or part of the Permanent Works the Contractor shall cease to be liable for the care of that Section or part from the date of issue of the Taking-Over Certificate, when the responsibility for the care of that Section or part shall pass to the Employer, and
FIDIC t987
(b) the Contractor shall take full responsibility for the care of any outstanding Works and materials and Plant for incorporation therein which he undertakes to finish during the Defects Liability Period until such outstanding Works have been completed pursuant to Clause 49.
Responsibility
to Rectify Loss or Damage
20.2 If any loss or damage happens to the Works, or any part thereof, or materials or Plant for incorporation therein, during the period for which the Contractor is responsible for the care thereof, from any cause whatsoever, other than the risks defined in Sub-Clause 20.4, the Contractor shall, at his own cost, rectify such loss
or damage so that the Permanent Works conform in every respect with the provisions of the Contract to the satisfaction of the Engineer. The Contractor shall also be liable for any loss or damage to the Works occasioned by him in the course of any operations carried out by him for the purpose of complying with his obligations under Clauses 49 and 50.
Loss or 20.3 In the event of any such loss or damage happening from any of the risks defined Damage Due to Employer's Risks
in Sub-Clause 20.4, or in combination with other risks, the Contractor shall, if and to the extent required by the Engineer, rectify the loss or damage and the
Engineer shall determine an addition to the Contract Price in accordance with
Clause 52 and shall notify the Contractor accordingly, with a copy to the Employer. In the case of a combination of risks causing loss or damage any such
determination shall take into account the proportional responsibility of the Contractor and the Employer.
Employer's Risks 20.4 The Employer's risks are: (a) war, hostilities (whether war be declared or not), invasion, act of foreign enemies, (b) rebellion, revolution, insurrection, or military or usurped power, or civil war, (c) ionising radiations, or contamination by radio-activity from any nuclear fuel, or from any nuclear waste from the combustion of nuclear fuel, radioactive toxic explosive, or other hazardous properties of any explosive nuclear assembly or nuclear component thereof, (d) pressure waves caused by aircraft or other aerial devices travelling at sonic or supersonic speeds,
(e) riot, commotion or disorder, unless solely restricted to employees of the Contractor or of his Subcontractors and arising from the conduct of the Works, (f) loss or damage due to the use or occupation by the Employer of any Section or
part of the Permanent Works, except as may be provided for in the Contract, (g) loss or damage to the extent that it is due to the design of the Works, other
than any part of the design provided by the Contractor or for which the Contractor is responsible, (h) any operation of the forces of nature against which an experienced contractor could not reasonably have been expected to take precautions.
Insurance of Works and Contractor's qu pme
21.1 The Contractor shall, without limiting his or the Employer's obligations and responsibilities under Clause 20, insure: (a) the Works, together with materials and Plant for incorporation therein, to the
full replacement cost (b) an additional sum of 15 per cent of such replacement cost, or as may be specified in Part II of these Conditions, to cover any additional costs of and incidental to the rectification of loss or damage including professional fees and the cost of demolishing and removing any part of the Works and of removing debris of whatsoever nature
(c) the Contractor's Equipment and other things brought onto the Site by the Contractor, for a sum sufficient to provide for their replacement at the Site.
FIDIC 1987
Scope of Cover 21.2 The insurance in paragraphs (a) and (b) of Sub-Clause 21.1 shall be in the joint names of the Contractor and the Employer and shall cover: (a) the Employer and the Contractor against all loss or damage from whatsoever cause arising, other than as provided in Sub-Clause 21.4, from the start of work at the Site until the date of issue of the relevant Taking-Over Certificate in respect of the Works or any Section or part thereof as the case may be, and
(b) the Contractor for his liability: (i) during the Defects Liability Period for loss or damage arising from a cause occurring prior to the commencement of the Defects Liability Period, and
(ii) for loss or damage occasioned by the Contractor in the course of any
operations carried out by him for the purpose of complying with his obligations under Clauses 49 and 50.
Responsibility for 21.3 Any amounts not insured or not recovered from the insurers shall be borne by the Amounts not Employer or the Contractor in accordance with their responsibilities under Recovered Clause 20. Exclusions 21.4 There shall be no obligation for the insurances in Sub-Clause 21.1 to include loss or damage caused by
(a) war, hostilities (where war be declared or not), invasion, act of foreign enemies, (b) rebellion, revolution, insurrection, or military or usurped power, or civil war,
Damage to 22.1
Persons and Property
(c) ionising radiations, or contamination by radio-activity from any nuclear fuel, or from any nuclear waste from the combustion of nuclear fuel, radio-active toxic explosive, or other hazardous properties of any explosive nuclear assembly or nuclear component thereof, (d) pressure waves caused by aircraft or other aerial devices travelling at sonic or supersonic speeds. The Contractor shall, except if and so far as the Contract provides otherwise, indemnify the Employer against all losses and claims in respect of: (a) death of or injury to any person, or
(b) loss of or damage to any property (other than the Works), which may arise out of or in consequence of the execution and completion of the
Works and the remedying of any defects therein, and against all claims,
Exceptions 22.2
proceedings, damages, costs, charges and expenses whatsoever in respect thereof or in relation thereto, subject to the exceptions defined in Sub-Clause 22.2. The "exceptions"referred to in Sub-Clause 22.1 are: (a) the permanent use or occupation of land by the Works, or any part thereof, (b) the right of the Employer to execute the Works, or any part thereof, on, over,
under, in or through any land, (c) damage to property which is the unavoidable result of the execution and completion of the Works, or the remedying of any defects therein, in accordance with the Contract, (d) death of or injury to persons or loss of or damage to property resulting from any act or neglect of the Employer, his agents, servants or other contractors, not being employed by the Contractor, or in respect of any claims, proceedings, damages, costs, charges and expenses in respect thereof or in relation thereto or, where the injury or damage was contributed to by the Contractor, his servants or agents, such part of the said injury or damage as may be just and equitable having regard to the extent of the responsibility of the Employer, his servants or agents
or other contractors for the injury or damage.
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1 C1
Indemnity by Employer
22.3
The Employer shall indemnify the Contractor against all claims, proceedings, damages, costs, charges and expenses in respect of the matters referred to in the
exceptions defined in Sub-Clause 22.2.
Third Party 23.1 The Contractor shall, without limiting his or the Employer's obligations and Insurance responsibilities under Clause 22, insure, in the joint names of the Contractor and the Employer, against liabilities for death of or injury to any person (other than (including as provided in Clause 24) or loss of or damage to any property (other than the Employer's Works) arising out of the performance of the Contract, other than the exceptions Property) defined in paragraphs (a), (b) and (c) of Sub-Clause 22.2.
Minimum Amount 23.2 Such insurance shall be for at least the amount stated in the Appendix to Tender. of Insurance
Cross Liabilities 23.3 The insurance policy shall include a cross liability clause such that the insurance shall apply to the Contractor and to the Employer as separate insureds.
Accident or Injury 24.1 The Employer shall not be liable for or in respect of any damages or
to Workmen
compensation payable to any workman or other person in the employment of the
Contractor or any Subcontractor, other than death or injury resulting from any act or default of the Employer, his agents or servants. The Contractor shall indemnify and keep indemnified the Employer against all such damages and compensation, other than those for which the Employer is liable as aforesaid, and
against all claims, proceedings, damages, costs, charges, and expenses whatsoever in respect thereof or in relation thereto.
Insurance 24.2 The Contractor shall insure against such liability and shall continue such insurance during the whole of the time that any persons are employed by him on Against Accident the Works. Provided that, in respect of any persons employed by any to Workmen Subcontractor, the Contractor's obligations to insure as aforesaid under this Sub-Clause shall be satisfied if the Subcontractor shall have insured against the
liability in respect of such persons in such manner that the Employer is
indemnified under the policy, but the Contractor shall require such
Subcontractor to produce to the Employer, when required, such policy of insurance and the receipt for the payment of the current premium. The Contractor shall provide evidence to the Employer prior to the start of work at the Site that the insurances required under the Contract have been effected and shall, within 84 days of the Commencement Date, provide the insurance policies
Evidence and 25.1 Terms of
Insurances
to the Employer. When providing such evidence and such policies to the Employer, the Contractor shall notify the Engineer of so doing. Such insurance policies shall be consistent with the general terms agreed prior to the issue of the Letter of Acceptance. The Contractor shall effect all insurances for which he is responsible with insurers and in terms approved by the Employer.
Adequacy of Insurances
Remedy on
Contractor's Failure to Insure
25.2
The Contractor shall notify the insurers of changes in the nature, extent or programme for the execution of the Works and ensure the adequacy of the
25.3
insurances at all times in accordance with the terms of the Contract and shall, when required, produce to the Employer the insurance policies in force and the receipts for payment of the current premiums. If the Contractor fails to effect and keep in force any of the insurances required under the Contract, or fails to provide the policies to the Employer within the period required by Sub-Clause 25.1, then and in any such case the Employer may
effect and keep in force any such insurances and pay any premium as may be necessary for that purpose and from time to time deduct the amount so paid from any monies due or to become due to the Contractor, or recover the same as a debt
Compliance with Policy Conditions
due from the Contractor. 25.4 In the event that the Contractor or the Employer fails to comply with conditions imposed by the insurance policies effected pursuant to the Contract, each shall indemnify the other against all losses and claims arising from such failure.
© FIDIC 1987
Compliance with 26.1 The Contractor shall conform in all respects, including by the giving of all notices and the paying of all fees, with the provisions of: Statutes, Regulations (a) any National or State Statute, Ordinance, or other Law, or any regulation, or bye-law of any local or other duly constituted authority in relation to the execution and completion of the Works and the remedying of any defects therein,
and (b) the rules and regulations of all public bodies and companies whose property or rights are affected or may be affected in any way by the Works,
and the Contractor shall keep the Employer indemnified against all penalties and liability of every kind for breach of any such provisions. Provided always that the Employer shall be responsible for obtaining any planning, zoning or other similar permission required for the Works to proceed and shall indemnify the Contractor in accordance with Sub-Clause 22.3.
Fossils
27.1 All fossils, coins, articles of value or antiquity and structures and other remains or things of geological or archaeological interest discovered on the Site shall, as between the Employer and the Contractor, be deemed to be the absolute property of the Employer. The Contractor shall take reasonable precautions to prevent his workmen or any other persons from removing or damaging any such article or
thing and shall, immediately upon discovery thereof and before removal, acquaint the Engineer of such discovery and carry out the Engineer's instructions
for dealing with the same. If, by reason of such instructions, the Contractor suffers delay and/or incurs costs then the Engineer shall, after due consultation with the Employer and the Contractor, determine: (a) any extension of time to which the Contractor is entitled under Clause 44, and
(b) the amount of such costs, which shall be added to the Contract Price, and shall notify the Contractor accordingly, with a copy to the Employer.
Patent Rights 28.1 The Contractor shall save harmless and indemnify the Employer from and against all claims and proceedings for or on account of infringement of any patent rights, design trademark or name or other protected rights in respect of any Contractor's Equipment, materials or Plant used for or in connection with or for incorporation in the Works and from and against all damages, costs, charges and expenses whatsoever in respect thereof or in relation thereto, except where
such infringement results from compliance with the design or Specification provided by the Engineer. Royalties 28.2 Except where otherwise stated, the Contractor shall pay all tonnage and other royalties, rent and other payments or compensation, if any, for getting stone, sand, gravel, clay or other materials required for the Works. Interference 29.1 All operations necessary for the execution and completion of the Works and the with Traffic remedying of any defects therein shall, so far as compliance with the requirements and Adjoining of the Contract permits, be carried on so as not to interfere unnecessarily or
Properties
improperly with: (a) the convenience of the public, or (b) the access to, use and occupation of public or private roads and footpaths to or of properties whether in the possession of the Employer or of any other person. The Contractor shall save harmless and indemnify the Employer in respect of all claims, proceedings, damages, costs, charges and expenses whatsoever arising Out
of, or in relation to, any such matters insofar as the Contractor is responsible therefor.
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101 ¶3
Avoidance 30.1 The Contractor shall use every reasonable means to prevent any of the roads or of Damage bridges communicating with or on the routes to the Site from being damaged or to Roads injured by any traffic of the Contractor or any of his Subcontractors and, in
particular , shall select routes, choose and use vehicles and restrict and distribute loads so that any such extraordinary traffic as will inevitably arise from the moving of materials, Plant, Contractor's Equipment or Temporary Works from and to the Site shall be limited, as far as reasonably possible, and so that no unnecessary damage or injury may be occasioned to such roads and bridges.
Transport of 30.2 Save insofar as the Contract otherwise provides, the Contractor shall be Contractor's responsible for and shall pay the cost of strengthening any bridges or altering or improving any road communicating with or on the routes to the Site to facilitate Equipment or the movement of Contractor's Equipment or Temporary Works and the Temporary Works Contractor shall indemnify and keep indemnified the Employer against all claims for damage to any such road or bridge caused by such movement, including such claims as may be made directly against the Employer, and shall negotiate and pay all claims arising solely out of such damage.
Transport of Materials or Plant
30.3 If, notwithstanding Sub-Clause 30.1, any damage occurs to any bridge or road
communicating with or on the routes to the Site arising from the transport of materials or Plant, the Contractor shall notify the Engineer with a copy to the
Employer, as soon as he becomes aware of such damage or as soon as he receives any claim from the authority entitled to make such claim. Where under any law or regulation the haulier of such materials or Plant is required to indemnify the
road authority against damage the Employer shall not be liable for any costs, charges or expenses in respect thereof or in relation thereto. In other cases the Employer shall negotiate the settlement of and pay all sums due in respect of such claim and shall indemnify the Contractor in respect thereof and in respect of all
claims, proceedings, damages, costs, charges and expenses in relation thereto. Provided that if and so far as any such claim or part thereof is, in the opinion of the Engineer, due to any failure on the part of the Contractor to observe and perform his obligations under Sub-Clause 30.1, then the amount, determined by the Engineer, after due consultation with the Employer and the Contractor, to be due to such failure shall be recoverable from the Contractor by the Employer and may be deducted by the Employer from any monies due or to become due to the Contractor and the Engineer shall notify the Contractor accordingly, with a copy to the Employer. Provided also that the Employer shall notify the Contractor whenever a settlement is to be negotiated and, where any amount may be due from the Contractor, the Employer shall consult with the Contractor before such settlement is agreed.
Waterborne
30.4 Where the nature of the Works is such as to require the use by the Contractor of
Traffic
waterborne transport the foregoing provisions of this Clause shall be construed as
though "road" included a lock, dock, sea wall or other structure related to a
Opportunities
for Other
waterway and "vehicle" included craft, and shall have effect accordingly. 31.1 The Contractor shall, in accordance with the requirements of the Engineer, afford all reasonable opportunities for carrying out their work to:
Contractors
any other contractors employed by the Employer and their workmen, \(b) the workmen of the Employer, and (a)
(c) the workmen of any duly constituted authorities who may be employed in the execution on or near the Site of any work not included in the Contract or of any contract which the Employer may enter into in connection with or ancillary to the Works.
Facilities for 31.2 If, however, pursuant to Sub-Clause 31.1 the Contractor shall, on the written Other Contractors request of the Engineer: (a) make available to any such other contractor, or to the Employer or any such authority, any roads or ways for the maintenance of which the Contractor is responsible, or
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(b) permit the use, by any such, of Temporary Works or Contractor's Equipment on the Site, or (c) provide any other service of whatsoever nature for any such, the Engineer shall determine an addition to the Contract Price in accordance with
Clause 52 and shall notify the Contractor accordingly, with a copy to the
Contractor to 32.1 Keep Site Clear
Employer. During the execution of the Works the Contractor shall keep the Site reasonably free
from all unnecessary obstruction and shall store or dispose of any
Contractor's Equipment and surplus materials and clear away and remove from the Site any wreckage, rubbish or Temporary Works no longer required.
Clearance of Site 33.1 on Completion
Upon the issue of any Taking-Over Certificate the Contractor shall clear away and remove from that part of the Site to which such Taking-Over Certificate relates all Contractor's Equipment, surplus material, rubbish and Temporary Works of every kind, and leave such part of the Site and Works clean and in a workmanlike condition to the satisfaction of the Engineer. Provided that the Contractor shall be entitled to retain on Site, until the end of the Defects Liability Period, such materials, Contractor's Equipment and Temporary Works as are required by him for the purpose of fulfilling his obligations during the Defects Liability Period.
Labour Engagement of 34.1 The Contractor shall, unless otherwise provided in the Contract, make his own Staff and Labour arrangements for the engagement of all staff and labour, local or other, and for
their payment, housing, feeding and transport. Returns of Labour 35.1 The Contractor shall, if required by the Engineer, deliver to the Engineer a return in detail, in such form and at such intervals as the Engineer may prescribe, and Contractor's showing the staff and the numbers of the several classes of labour from time to Equipment time employed by the Contractor on the Site and such information respecting Contractor's Equipment as the Engineer may require.
Materials, Plant and Workmanship Quality of 36.1 All materials, Plant and workmanship shall be (a) of the respective kinds described in the Contract and in accordance with the Engineer s instructions, and (b) subjected from time to time to such tests as the Engineer may require at the place of manufacture, fabrication or preparation, or on the Site or at such other place or places as may be specified in the Contract, or at all or any of such places.
The Contractor shall provide such assistance, labour, electricity, fuels, stores, apparatus and instruments as are normally required for examining, measuring and testing any materials or Plant and shall supply samples of materials, before incorporation in the Works, for testing as may be selected and required by the Engineer. Cost of Samples 36.2 All samples shall be supplied by the Contractor at his own cost if the supply thereof is clearly intended by or provided for in the Contract. Cost of Tests 36.3 The cost of making any test shall be borne by the Contractor if such test is (a) clearly intended by or provided for in the Contract, or (b) particularised in the Contract (in cases only of a test under load or of a test to
ascertain whether the design of any finished or partially finished work is appropriate for the purposes which it was intended to fulfil) in sufficient detail to enable the Contractor to price or allow for the same in his Tender.
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Cost of Tests not
Provided for
36.4 If any test required by the Engineer which is (a) not so intended by or provided for, or
(b) (in the cases above mentioned) not so particularised, or (c) (though so intended or provided for) required by the Engineer to be carried out
at any place other than the Site or the place of manufacture, fabrication or preparation of the materials or Plant tested,
shows the materials, Plant or workmanship not to be in accordance with the provisions of the Contract to the satisfaction of the Engineer, then the cost of
Engineer's
Determination where Tests not Provided for
such test shall be borne by the Contractor, but in any other case Sub-Clause 36.5 shall apply. 36.5 Where, pursuant to Sub-Clause 36.4, this Sub-Clause applies the Engineer shall, after due consultation with the Employer and the Contractor, determine: (a) any
.
.
extension of time to which the Contractor is entitled under Clause 44, and
(b) the amount of such costs, which shall be added to the Contract Price, and shall notify the Contractor accordingly, with a copy to the Employer.
Inspection of Operations
37.1 The Engineer, and any person authorised by him, shall at all reasonable times have
access to the Site and to all workshops and places where materials or Plant
are being manufactured, fabricated or prepared for the Works and the Contractor shall afford every facility for and every assistance in obtaining the right to such access.
Inspection and 37.2 The Engineer shall be entitled, during manufacture, fabrication or preparation to inspect and test the materials and Plant to be supplied under the Contract. If Testing materials or Plant are being manufactured, fabricated or prepared in workshops
or places other than those of the Contractor, the Contractor shall obtain
permission for the Engineer to carry out such inspection and testing in those workshops or places. Such inspection or testing shall not release the Contractor from any obligation under the Contract. The Contractor shall agree with the Engineer on the time and place for the inspection or testing of any materials or Plant as provided in the Contract. The
Dates for 37.3 Inspection and Testing Engineer shall give the Contractor not less than 24 hours notice of his intention to carry out the inspection or to attend the tests. If the Engineer, or his duly authorised representative, does not attend on the date agreed, the Contractor may, unless otherwise instructed by the Engineer, proceed with the tests, which
shall be deemed to have been made in the presence of the Engineer. The Contractor shall forthwith forward to the Engineer duly certified copies of the test readings. If the Engineer has not attended the tests, he shall accept the said readings as accurate.
Rejection
37.4
If, at the time and place agreed in accordance with Sub-Clause 37.3, the mate or Plant are not ready for inspection or testing or if, as a result of the inspection or testing referred to in this Clause, the Engineer determines that the materials or Plant are defective or otherwise not in accordance with the Contract, he may reject the materials or Plant and shall notify the Contractor thereof immediately. The notice shall state the Engineer's objections with reasons. The Contractor shall then promptly make good the defect or ensure that rejected materials or Plant comply with the Contract. If the Engineer so requests, the tests of rejected
materials or Plant shall be made or repeated under the same terms and conditions. All costs incurred by the Employer by the repetition of the tests shall, after due consultation with the Employer and the Contractor, be determined by the Engineer and shall be recoverable from the Contractor by the Employer and may be deducted from any monies due or to become due to the Contractor and
the Engineer shall notify the Contractor accordingly, with a copy to the Employer.
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Independent 37.5 The Engineer may delegate inspection and testing of materials or Plant to an independent inspector. Any such delegation shall be effected in accordance with Inspection Sub-Clause 2.4 and for this purpose such independent inspector shall be considered as an assistant of the Engineer. Notice of such appointment (not being less than 14 days) shall be given by the Engineer to the Contractor.
Examination of Work before Covering up
38.1 No part of the Works shall be covered up or put out of view without the approval
of the Engineer and the Contractor shall afford full opportunity for the Engineer to examine and measure any such part of the Works which is about to be covered up or put out of view and to examine foundations before any part of the Works is placed thereon. The Contractor shall give notice to the Engineer whenever any
such part of the Works or foundations is or are ready or about to be ready for examination and the Engineer shall, without unreasonable delay, unless he considers it unnecessary and advises the Contractor accordingly, attend for the purpose of examining and measuring such part of the Works or of examining such foundations.
Uncovering and Making Openings
38.2 The Contractor shall uncover any part of the Works or make openings in or through the same as the Engineer may from time to time instruct and shall
reinstate and make good such part. If any such part has been covered up or put
out of view after compliance with the requirement of Sub-Clause 38.1 and is found to be executed in accordance with the Contract, the Engineer shall, after due consultation with the Employer and the Contractor, determine the amount of the Contractor's costs in respect of such of uncovering, making openings in or through, reinstating and making good the same, which shall be added to the Contract Price, and shall notify the Contractor accordingly, with a copy to the Employer. In any other case all costs shall be borne by the Contractor. The Engineer shall have authority to issue instructions from time to time, for:
Removal of 39.1 . . . . Improper Work, (a) the removal from the Site, within such time or times as may be specified in the Materials or Plant .
instruction, of any materials or Plant which, in the opinion of the Engineer, are not in accordance with the Contract, (b) the substitution of proper and suitable materials or Plant, and
(c) the removal and proper re-execution, notwithstanding any previous test thereof or interim payment therefor, of any work which, in respect of (i) materials, Plant or workmanship, or (ii) design by the Contractor or for which he is responsible,
is not, in the opinion of the Engineer, in accordance with the Contract.
Default of 39.2 In case of default on the part of the Contractor in carrying out such instruction
Contractor in Compliance
within the time specified therein or, if none, within a reasonable time, the Employer shall be entitled to employ and pay other persons to carry out the same
and all costs consequent thereon or incidental thereto shall, after due
consultation with the Employer and the Contractor, be determined by the Engineer and shall be recoverable from the Contractor by the Employer, and may
be deducted by the Employer from any monies due or to become due to the Contractor and the Engineer shall notify the Contractor accordingly, with a copy to the Employer.
Suspension Suspension 40.1 The Contractor shall, on the instructions of the Engineer, suspend the progress of of Work
the Works or any part thereof for such time and in such manner as the Engineer
may consider necessary and shall, during such suspension, properly protect and secure the Works or such part thereof so far as is necessary in the opinion of the Engineer. Unless such suspension is (a) otherwise provided for in the Contract, or
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(b) necessary by reason of some default of or breach of contract by the Contractor or for which he is responsible, or (c) necessary by reason of climatic conditions on the Site, or (d) necessary for the proper execution of the Works or for the safety of the Works or any part thereof (save to the extent that such necessity arises from any act or
default by the Engineer or the Employer or from any of the risks defined in Sub-Clause 20.4), Sub-Clause 40.2 shall apply.
Engineer's Determination following
40.2 Where, pursuant to Sub-Clause 40.1, this Sub-Clause applies the Engineer shall, after due consultation with the Employer and the Contractor, determine . (a) any extension of time to which the Contractor is entitled under Clause 44, and
Suspension
(b) the amount, which shall be added to the Contract Price, in respect of the cost incurred by the Contractor by reason of such suspension,
and shall notify the Contractor accordingly, with a copy to the Employer.
Suspension lasting more than 84 Days
40.3 If the progress of the Works or any part thereof is suspended on the written instructions of the Engineer and if permission to resume work is not given by the Engineer within a period of 84 days from the date of suspension then, unless such
suspension is within paragraph (a), (b), (c) or (d) of Sub-Clause 40.1, the
Contractor may give notice to the Engineer requiring permission, within 28 days from the receipt thereof, to proceed with the Works or that part thereof in regard to which progress is suspended. If, within the said time, such permission is not granted, the Contractor may, but is not bound to, elect to treat the suspension, where it affects part only of the Works, as an omission of such part under Clause 51 by giving a further notice to the Engineer to that effect, or, where it affects the whole of the Works, treat the suspension as an event of default by the Employer
and terminate his employment under the Contract in accordance with the provisions of Sub-Clause 69.1, whereupon the provisions of Sub-Clauses 69.2 and 69.3 shall apply.
Commencement and Delays Commencement 41.1 TheContractor shall commence the Works as soon as is reasonably possible after the receipt by him of a notice to this effect from the Engineer, which notice shall of Works
Possession of 42.1 Site and Access Thereto
be issued within the time stated in the Appendix to Tender after the date of the Letter of Acceptance. Thereafter, the Contractor shall proceed with the Works with due expedition and without delay. Save insofar as the Contract may prescribe: .
.
.
(a) the extent of portions of the Site of which the Contractor is to be given
possession from time to time, and (b) the order in which such portions shall be made available to the Contractor and subject to any requirement in the Contract as to the order in which the Works shall be executed, the Employer will, with the Engineer's notice to commence the Works, give to the Contractor possession of (c) so much of the Site, and
(d) such access as, in accordance with the Contract, is to be provided by the Employer
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as may be required to enable the Contractor to commence and proceed with the execution of the Works in accordance with the programme referred to in Clause 14, if any, and otherwise in accordance with such reasonable proposals as the Contractor shall, by notice to the Engineer with a copy to the Employer, make.
The Employer will, from time to time as the Works proceed, give to the Contractor possession of such further portions of the Site as may be required to
enable the Contractor to proceed with the execution of the Works with due dispatch in accordance with such programme or proposals, as the case may be.
Failure to
Give 42.2 If the Contractor suffers delay and/or incurs costs from failure on the part of the
Possession
Employer to give possession in accordance with the terms of Sub-Clause 42.1, the
Engineer shall, after due consultation with the Employer and the Contractor, determine:
(a) any extension of time to which the Contractor is entitled under Clause 44, and
(b) the amount of such costs, which shall be added to the Contract Price, and shall notify the Contractor accordingly, with a copy to the Employer.
Wayleaves and 42.3 The Contractor shall bear all costs and charges for special or temporary Facilities wayleaves required by him in connection with access to the Site. The Contractor shall also provide at his own cost any additional facilities outside the Site required by him for the purposes of the Works.
Time for Completion
Extension of Time for Completion
43.1 The whole of the Works and, if applicable, any Section required to be completed within a particular time as stated in the Appendix to Tender, shall be completed,
44.1
in accordance with the provisions of Clause 48, within the time stated in the Appendix to Tender for the whole of the Works or the Section (as the case may be), calculated from the Commencement Date, or such extended time as may be allowed under Clause 44. In the event of (a) the amount or nature of extra or additional work, or (b) any cause of delay referred to in these Conditions, or (c) exceptionally adverse climatic conditions, or
(d) any delay, impediment or prevention by the Employer, or (e) other special circumstances which may occur, other than through a default of or breach of contract by the Contractor or for which he is responsible,
being such as fairly to entitle the Contractor to an extension of the Time for Completion of the Works, or any Section or part thereof, the Engineer shall, after due consultation with the Employer and the Contractor, determine the amount of such extension and shall notify the Contractor accordingly, with a
Contractor to Provide Particulars
copy to the Employer. 44.2 Provided that the Engineer is not bound to make any determination unless the Contractor has (a) within 28 days after such event has first arisen notified the Engineer with a copy to the Employer, and
(b) within 28 days, or such other reasonable time as may be agreed by the Engineer, after such notification submitted to the Engineer detailed particulars of any extension of time to which he may consider himself entitled in order that such submission may be investigated at the time.
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Interim 44.3 Provided also that where an event has a continuing effect such that it is not Determination of Extension
practicable for the Contractor to submit detailed particulars within the period of 28 days referred to in Sub-Clause 44.2(b), he shall nevertheless be entitled to an
extension of time provided that he has submitted to the Engineer interim particulars at intervals of not more than 28 days and final particulars within 28 days of the end of the effects resulting from the event. On receipt of such interim
particulars, the Engineer shall, without undue delay, make an interim determination of extension of time and, on receipt of the final particulars, the Engineer shall review all the circumstances and shall determine an overall extension of time in regard to the event. In both such cases the Engineer shall
make his determination after due consultation with the Employer and the Contractor and shall notify the Contractor of the determination, with a copy to the Employer. No final review shall result in a decrease of any extension of time already determined by the Engineer. on 45.1 Subject to any provision to the contrary contained in the Contract, none of the Restriction Works Hours shall, save as hereinafter provided, be carried on during the night or on Working locally recognised days of rest without the consent of the Engineer, except when work is unavoidable or absolutely necessary for the saving of life or property or for the safety of the Works, in which case the Contractor shall immediately advise the Engineer. Provided that the provisions of this Clause shall not be applicable in the case of any work which it is customary to carry out by multiple shifts.
Rate of Progress 46.1 If for any reason, which does not entitle the Contractor to an extension of time, the rate of progress of the Works or any Section is at any time, in the opinion of the Engineer, too slow to comply with the Time for Completion, the Engineer
shall so notify the Contractor who shall thereupon take such steps as are necessary, subject to the consent of the Engineer, to expedite progress so as to comply with the Time for Completion. The Contractor shall not be entitled to any additional payment for taking such steps. If, as a result of any notice given by the Engineer under this Clause, the Contractor considers that it is necessary to do any work at night or on locally recognised days of rest, he shall be entitled to seek the
consent of the Engineer so to do. Provided that if any steps, taken by the Contractor in meeting his obligations under this Clause, involve the Employer in
additional supervision costs, such costs shall, after due consultation with the Employer and the Contractor, be determined by the Engineer and shall be recoverable from the Contractor by the Employer, and may be deducted by the Employer from any monies due or to become due to the Contractor and the Engineer shall notify the Contractor accordingly, with a copy to the Employer. Liquidated 47.1 If the Contractor fails to comply with the Time for Completion in accordance with Clause 48, for the whole of the Works or, if applicable, any Section within Damages for Delay the relevant time prescribed by Clause 43, then the Contractor shall pay to the Employer the relevant sum stated in the Appendix to Tender as liquidated damages for such default and not as a penalty (which sum shall be the only monies due from the Contractor for such default) for every day or part of a day which shall elapse between the relivant Time for Completion and the date stated in a Taking-Over Certificate of the whole of the Works or the relevant Section, subject to the applicable limit stated in the Appendix to Tender. The Employer may, without prejudice to any other method of recovery, deduct the amount of such damages from any monies due or to become due to the Contractor. The payment or deduction of such damages shall not relieve the Contractor from his obligation to complete the Works, or from any other of his obligations and liabilities under the Contract. Reduction of 47.2 If, before the Time for Completion of the whole of the Works or, if applicable, any Section, a Taking-Over Certificate has been issued for any part of the Work Liquidated or of a Section, the liquidated damages for delay in completion of the remainder Damages of the Works or of that Section shall, for any period of delay after the date stated in such Taking-Over Certificate, and in the absence of alternative provisions in the Contract, be reduced in the proportion which the value of the part so certified
bears to the value of the whole of the Works or Section, as applicable. The
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provisions of this Sub-Clause shall only apply to the rate of liquidated damages and shall not affect the limit thereof.
Taking-Over Certificate
48.1 When the whole of the Works have been substantially completed and have satisfactorily passed any Tests on Completion prescribed by the Contract, the
Contractor may give a notice to that effect to the Engineer, with a copy to the Employer, accompanied by a written undertaking to finish with due expedition any outstanding work during the Defects Liability Period. Such notice and undertaking shall be deemed to be a request by the Contractor for the Engineer to
issue a Taking-Over Certificate in respect of the Works. The Engineer shall,
within 21 days of the date of delivery of such notice, either issue to the Contractor, with a copy to the Employer, a Taking-Over Certificate, stating the
date on which, in his opinion, the Works were substantially completed in
Taking Over of Sections or Parts
accordance with the Contract, or give instructions in writing to the Contractor specifying all the work which, in the Engineer's opinion, is required to be done by the Contractor before the issue of such Certificate. The Engineer shall also notify the Contractor of any defects in the Works affecting substantial completion that may appear after such instructions and before completion of the Works specified therein. The Contractor shall be entitled to receive such Taking-Over Certificate within 21 days of completion, to the satisfaction of the Engineer, of the Works so specified and remedying any defects so notified. 48.2 Similarly, in accordance with the procedure set out in Sub-Clause 48.1, the Contractor may request and the Engineer shall issue a Taking-Over Certificate in respect of: (a) any Section in respect of which a separate Time for Completion is provided in the Appendix to Tender, or (b) any substantial part of the Permanent Works which has been both completed to the satisfaction of the Engineer and, otherwise than as provided for in the Contract, occupied or used by the Employer, or (c) any part of the Permanent Works which the Employer has elected to occupy or use prior to completion (where such prior occupation or use is not provided for in the Contract or has not been agreed by the Contractor as a temporary measure).
Substantial 48.3 If any part of the Permanent Works has been substantially completed and has satisfactorily passed any Tests on Completion prescribed by the Contract, the Completion Engineer may issue a Taking-Over Certificate in respect of that part of the of Parts Permanent Works before completion of the whole of the Works and, upon the issue of such Certificate, the Contractor shall be deemed to have undertaken to complete with due expedition any outstanding work in that part of the Permanent Works during the Defects Liability Period. Surfaces 48.4 Provided that a Taking-Over Certificate given in respect of any Section or part of the Permanent Works before completion of the whole of the Works shall not be Requiring Reinstatement deemed to certify completion of any ground or surfaces requiring reinstatement, unless such Taking-Over Certificate shall expressly so state.
Defects Liability Defects Liability
Period
49.1 In these Conditions the expression "Defects Liability Period" shall mean the defects liability period named in the Appendix to Tender, calculated from: (a) the date of completion of the Works certified by the Engineer in accordance with Clause 48, or (b) in the event of more than one certificate having been issued by the Engineer under Clause 48, the respective dates so certified and in relation to the Defects Liability Period the expression "the Works" shall be construed accordingly.
)
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Completion of 49.2 To the intent that the Works shall, at or as soon as practicable after the expiration of the Defects Liability Period, be delivered to the Employer in the condition Outstanding Work and Remedying required by the Contract, fair wear and tear excepted, to the satisfaction of the Defects Engineer, the Contractor shall: (a) complete the work, if any, outstanding on the date stated in the Taking-Over Certificate as soon as practicable after such date and (b) execute all such work of amendment, reconstruction, and remedying defects,
shrinkages or other faults as the Engineer may, during the Defects Liability Period or within 14 days after its expiration, as a result of an inspection made by
or on behalf of the Engineer prior to its expiration, instruct the Contractor to execute.
Cost of Remedying Defects
49.3
All work referred to in Sub-Clause 49.2 (b) shall be executed by the Contractor at his own cost if the necessity thereof is, in the opinion of the Engineer, due to: (a) the use of materials, Plant or workmanship not in accordance with the
Contract, or (b) where the Contractor is responsible for the design of part of the Permanent Works, any fault in such design, or (c) the neglect or failure on the part of the Contractor to comply with any obligation, expressed or implied, on the Contractor's part under the Contract. If, in the opinion of the Engineer, such necessity is due to any other cause, he shall
determine an addition to the Contract Price in accordance with Clause 52 and shall notify the Contractor accordingly, with a copy to the Employer.
Contractor's Failure to Carry Out Instructions
49.4 In case of default on the part of the Contractor in carrying out such instructi within a reasonable time, the Employer shall be entitled to employ and pay other persons to carry out the same and if such work is work which, in the opinion of the Engineer, the Contractor was liable to do at his own cost under the Contract,
then all costs consequent thereon or incidental thereto shall, after due
consultation with the Employer and the Contractor, be determined by the Engineer and shall be recoverable from the Contractor by the Employer, and may
be deducted by the Employer from any monies due or to become due to the Contractor and the Engineer shall notify the Contractor accordingly, with a copy
to the Employer. Contractor 50.1 If any defect, shrinkage or other fault in the Works appears at any time prior to the end of the Defects Liability Period, the Engineer may instruct the Contractor, to Search with copy to the Employer, to search under the directions of the Engineer for the cause thereof. Unless such defect, shrinkage or other fault is one for which the Contractor is liable under the Contract, the Engineer shall, after due consultation with the Employer and the Contractor, determine the amount in respect of the costs of such search incurred by the Contractor, which shall be added to the Contract Price and shall notify the Contractor accordingly, with a copy to the Employer. If such defect, shrinkage or other fault is one for which the Contractor is liable, the cost of the work carried out in searching as aforesaid shall be borne by the Contractor and he shall in such case remedy such defect, shrinkage or other fault at his own cost in accordance with the provisions of Clause 49.
Alterations, Additions and Omissions Variations 51.1 The Engineer shall make any variation of the form, quality or quantity of the Works or any part thereof that may, in his opinion, be necessary and for that purpose, or if for any other reason it shall, in his opinion, be appropriate, he shall
have the authority to instruct the Contractor to do and the Contractor shall do any of the following: (a) increase or decrease the quantity of any work included In the Contract, (b) omit any such work (but not if the omitted work is to be carried out by the Employer or by another contractor),
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(c) change the character or quality or kind of any such work, (d) change the levels, lines, position and dimensions of any part of the Works,
(e) execute additional work of any kind necessary for the completion of the Works, (f) change any specified sequence or timing of construction of any part of the Works. No such variation shall in any way vitiate or invalidate the Contract, but the effect, if any, of all such variations shall be valued in accordance with Clause 52. Provided that where the issue of an instruction to vary the Works is necessitated
Instructions for 51.2 Variations
by some default of or breach of contract by the Contractor or for which he is responsible, any additional cost attributable to such default shall be borne by the Contractor. The Contractor shall not make any such variation without an instruction of the Engineer. Provided that no instruction shall be required for increase or decrease in the quantity of any work where such increase or decrease is not the result of an instruction given under this Clause, but is the result of the quantities exceeding or being less than those stated in the Bill of Quantities.
Valuation of Variations
52.1 All variations referred to in Clause 51 and any additions to the Contract Price which are required to be determined in accordance with Clause 52 (for the
purposes of this Clause referred to as "varied work"), shall be valued at the rates and prices set out in the Contract if, in the opinion of the Engineer, the same shall be applicable. If the Contract does not contain any rates or prices applicable to the varied work, the rates and prices in the Contract shall be used as the basis for valuation so far as may be reasonable, failing which, after due consultation by the Engineer with the Employer and the Contractor, suitable rates or prices shall be
agreed upon between the Engineer and the Contractor. In the event of disagreement the Engineer shall fix such rates or prices as are, in his opinion, appropriate and shall notify the Contractor accordingly, with a copy to the Employer. Until such time as rates or prices are agreed or fixed, the Engineer shall
determine provisional rates or prices to enable on-account payments to be included in certificates issued in accordance with Clause 60.
Power 52.2 Provided that if the nature or amount of any varied work relative to the nature or amount of the whole of the Works or to any part thereof, is such that, in the of Engineer
to Fix Rates
opinion of the Engineer, the rate or price contained in the Contract for any item
of the Works is, by reason of such varied work, rendered inappropriate or
inapplicable, then, after due consultation by the Engineer with the Employer and the Contractor, a suitable rate or price shall be agreed upon between the Engineer and the Contractor. In the event of disagreement the Engineer shall fix such other
rate or price as is, in his opinion, appropriate and shall notify the Contractor accordingly, with a copy to the Employer. Until such time as rates or prices are agreed or fixed, the Engineer shall determine provisional rates or prices to enable
on-account payments to be included in certificates issued in accordance with Clause 60. Provided also that no varied work instructed to be done by the Engineer pursuant to Clause 51 shall be valued under Sub-Clause 52.1 or under this Sub-Clause unless, within 14 days of the date of such instruction and, other than in the case of omitted work, before the commencement of the varied work, notice shall have been given either:
(a) by the Contractor to the Engineer of his intention to claim extra payment or a varied rate or price, or
(b) by the Engineer to the Contractor of his intention to vary a rate or price.
Variations 52.3 If, on the issue of the Taking-Over Certificate for the whole of the Works, it is found that as a result of: Exceeding 15
per cent
(a) all varied work valued under Sub-Clauses 52.1 and 52.2, and
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(b) all adjustments upon measurement of the estimated quantities set out in the Bill of Quantities, excluding Provisional Sums, dayworks and adjustments of price made under Clause 70, but not from any other cause, there have been additions to or deductions from the Contract Price which taken together are in excess of 15 per cent of the "Effective
Contract Price" (which for the purposes of this Sub-Clause shall mean the Contract Price, excluding Provisional Sums and allowance for dayworks, if any)
then and in such event (subject to any action already taken under any other Sub-Clause of this Clause), after due consultation by the Engineer with the Employer and the Contractor, there shall be added to or deducted from the Contract Price such further sum as may be agreed between the Contractor and the Engineer or, failing agreement, determined by the Engineer having regard to the Contractor's Site and general overhead costs of the Contract. The Engineer shall notify the Contractor of any determination made under this Sub-Clause, with a copy to the Employer. Such sum shall be based only on the amount by which such additions or deductions shall be in excess of 15 per cent of the Effective Contract Price.
Daywork
52.4 The Engineer may, if in his opinion it is necessary or desirable, issue an instruction that any varied work shall be executed on a daywork basis. The Contractor shall then be paid for such varied work under the terms set out in the daywork schedule included in the Contract and at the rates and prices affixed thereto by him in the Tender.
The Contractor shall furnish to the Engineer such receipts or other vouchers as may be necessary to prove the amounts paid and, before ordering materials, shall submit to the Engineer quotations for the same for his approval.
In respect of such of the Works executed on a daywork basis, the Contractor shall, during the continuance of such work, deliver each day to the Engineer an
exact list in duplicate of the names, occupation and time of all workmen employed on such work and a statement, also in duplicate, showing the description and quantity of all materials and Contractor's Equipment used thereon or therefor other than Contractor's Equipment which is included in the percentage addition in accordance with such daywork schedule.One copy of each list and statement will, if correct, or when agreed, be signed by the Engineer and returned to the Contractor.
At the end of each month the Contractor shall deliver to the Engineer a priced
statement of the labour, materials and Contractor's Equipment, except as aforesaid, used and the Contractor shall not be entitled to any payment unless such lists and statements have been fully and punctually rendered. Provided always that if the Engineer considers that for any reason the sending of such lists or statements by the Contractor, in accordance with the foregoing provision, was impracticable he shall nevertheless be entitled to authorise payment for such work, either as daywork, on being satisfied as to the time employed and the labour, materials and Contractor's Equipment used on such work, or at such value therefor as shall, in his opinion, be fair and reasonable.
Procedure for Claims Notice of Claims 53.1
Notwithstanding any other provision of the Contract, if the Contractor intends to
claim any additional payment pursuant to any Clause of these Conditions or otherwise, he shall give notice of his intention to the Engineer, with a copy to the Employer, within 28 days after the event giving rise to the claim has first arisen.
Contemporary 53.2 Upon the happening of the event referred to in Sub-Clause 53.1, the Contractor
Records
shall keep such contemporary records as may reasonably be necessary to support
any claim he may subsequently wish to make. Without necessarily admitting the Employer's liability, the Engineer shall, on receipt of a notice under Sub-Clause 53.1, inspect such contemporary records and may instruct the Contractor to keep
Ut..
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Substantiation of Claims
Failure to Comply
any further contemporary records as are reasonable and may be material to the claim of which notice has been given. The Contractor shall permit the Engineer to inspect all records kept pursuant to this Sub-Clause and shall supply him with copies thereof as and when the Engineer so instructs. 53.3 Within 28 days, or such other reasonable time as may be agreed by the Engineer, of giving notice under Sub-Clause 53.1, the Contractor shall send to the Engineer an account giving detailed particulars of the amount claimed and the grounds upon which the claim is based. Where the event giving rise to the claim has a continuing effect, such account shall be considered to be an interim account and the Contractor shall, at such intervals as the Engineer may reasonably require, send further interim accounts giving the accumulated amount of the claim and any further grounds upon which it is based. In cases where interim accounts are sent to the Engineer, the Contractor shall send a final account within 28 days of the end of the effects resulting from the event. The Contractor shall, if required by the Engineer so to do, copy to the Employer all accounts sent to the Engineer pursuant to this Sub-Clause. 53.4 If the Contractor fails to comply with any of the provisions of this Clause in respect of any claim which he seeks to make, his entitlement to payment in respect
thereof shall not exceed such amount as the Engineer or any arbitrator or arbitrators appointed pursuant to Sub-Clause 67.3 assessing the claim considers
to be verified by contemporary records (whether or not such records were brought to the Engineer's notice as required under Sub-Clauses 53.2 and 53.3). Payment of Claims 53.5 The Contractor shall be entitled to have included in any interim payment certified by the Engineer pursuant to Clause 60 such amount in respect of any claim as the Engineer, after due consultation with the Employer and the Contractor, may
consider due to the Contractor provided that the Contractor has supplied sufficient particulars to enable the Engineer to determine the amount due. If such particulars are insufficient to substantiate the whole of the claim, the Contractor shall be entitled to payment in respect of such part of the claim as such particulars may substantiate to the satisfaction of the Engineer. The Engineer shall notify the Contractor of any determination made under this.Sub-Clause, with a copy to the Employer.
Contractor's Equipment, Temporary Works and Materials Contractor's 54.1 All Contractor's Equipment, Temporary Works and materials provided by the
Contractor shall, when brought on to the Site, be deemed to be exclusively intended for the execution of the Works and the Contractor shall not remove the same or any part thereof, except for the purpose of moving it from one part of the Site to another, without the consent of the Engineer. Provided that consent shall
Equipment, Temporary Works and Materials; Exclusive Use for the Works
not be required for vehicles engaged in transporting any staff, labour, Contractor's Equipment, Temporary Works, Plant or materials to or from the Site.
Employer not 54.2 The Employer shall not at any time be liable, save as mentioned in Clauses 20 and Liable for Damage 65, for the loss of or damage to any of the said Contractor's Equipment, Temporary Works or materials.
Customs Clearance
54.3
The Employer will use his best endeavours in assisting the Contractor, where required,
in obtaining clearance through the Customs of Contractor's
Equipment, materials and other things required for the Works.
Re-export of 54.4 In respect of any Contractor's Equipment which the Contractor has imported for the purposes of the Works, the Employer will use his best endeavours to assist the Contractor's Contractor, where required, in procuring any necessary Government consent to Equipment the re-export of such Contractor's Equipment by the Contractor upon the removal thereof pursuant to the terms of the Contract.
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2c5
Conditions of Hire 54.5 With a view to securing, in the event of termination under Clause 63, th of Contractor's continued availability, for the purpose of executing the Works, of any hired Contractor's Equipment, the Contractor shall not bring on to the Site any hired Equipment Contractor's Equipment unless there is an agreement for the hire thereof (which agreement shall be deemed not to include an agreement for hire purchase) which contains a provision that the owner thereof will, on request in writing made by the Employer within 7 days after the date on which any termination has become effective, and on the Employer undertaking to pay all hire charges in respect thereof from such date, hire such Contractor's Equipment to the Employer on the same terms in all respects as the same was hired to the Contractor save that the Employer shall be entitled to permit the use thereof by any other contractor employed by him for the purpose of executing and completing the Works and remedying any defects therein, under the terms of the said Clause 63.
Costs for the 54.6 In the event of the Employer entering into any agreement for the hire of Contractor's Equipment pursuant to Sub-Clause 54.5, all sums properly paid by Purpose of Clause 63 the Employer under the provisions of any such agreement and all costs incurred by him (including stamp duties) in entering into such agreement shall be deemed, for the purpose of Clause 63, to be part of the cost of executing and completing the Works and the remedying of any defects therein.
Incorporation of 54.7 The Contractor shall, where entering into any subcontract for the execution of Clause in any part of the Works, incorporate in such subcontract (by reference or
Subcontracts
otherwise) the provisions of this Clause in relation to Contractor's Equipment,
Temporary Works or materials brought on to the Site by the Subcontractor.
Approval of Materials not Implied
54.8 The operation of this Clause shall not be deemed to imply any approval by the
Engineer of the materials or other matters referred to therein nor shall it prevent the rejection of any such materials at any time by the Engineer.
Measurement Quantities 55.1 The quantities set out in the Bill of Quantities are the estimated quantities for the Works, and they are not to be taken as the actual and correct quantities of the Works to be executed by the Contractor in fulfilment of his obligations under the
Works to be 56.1 Measured
Contract. The Engineer shall, except as otherwise stated, ascertain and determine by measurement the value of the Works in accordance with the Contract and the Contractor shall be paid that value in accordance with Clause 60. The Engineer shall, when he requires any part of the Works to be measured, give reasonable notice to the Contractor's authorised agent, who shall: (a) forthwith attend or send a qualified representative to assist the Engineer in making such measurement, and (b) supply all particulars required by the Engineer. Should the Contractor not attend, or neglect or omit to send such representative, then the measurement made by the Engineer or approved by him shall be taken to
be the correct measurement of such part of the Works. For the purpose of measuring such Permanent Works as are to be measured by records and drawings, the Engineer shall prepare records and drawings as the work proceeds and the Contractor, as and when called upon to do so in writing, shall, within 14 days, attend to examine and agree such records and drawings with the Engineer
and shall sign the same when so agreed. If the Contractor does not attend to examine and agree such records and drawings, they shall be taken to be correct.
If, after examination of such records and drawings, the Contractor does not agree the same or does not sign the same as agreed, they shall nevertheless be taken to be correct, unless the Contractor, within 14 days of such examination, lodges with the Engineer notice of the respects in which such records and drawings are claimed by him to be incorrect. On receipt of such notice, the Engineer shall review the records and drawings and either confirm or vary them.
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Method of 57.1 The Works shall be measured net, notwithstanding any general or local custom, Measurement except where otherwise provided for in the Contract. Breakdown of 57.2 For the purposes of statements submitted in accordance with Sub-Clause 60.1, Lump Sum Items
the Contractor shall submit to the Engineer, within 28 days after the receipt of the
Letter of Acceptance, a breakdown for each of the lump sum items contained in the Tender. Such breakdowns shall be subject to the approval of the Engineer.
Provisional Sums Definition of 58.1 "Provisional Sum" means a sum included in the Contract and so designated in the Bill of Quantities for the execution of any part of the Works or for the supply "Provisional
Sum"
of goods, materials, Plant or services, or for contingencies, which sum may be used, in whole or in part, or not at all, on the instructions of the Engineer. The Contractor shall be entitled to only such amounts in respect of the work, supply or contingencies to which such Provisional Sums relate as the Engineer shall
determine in accordance with this Clause. The Engineer shall notify the Contractor of any determination made under this Sub-Clause, with a copy to the Employer. Use of 58.2 In respect of every Provisional Sum the Engineer shall have authority to issue instructions for the execution of work or for the supply of goods, materials, Plant Provisional or services by: Sums (a) the Contractor, in which case the Contractor shall be entitled to an amount equal to the value thereof determined in accordance with Clause 52, (b) a nominated Subcontractor, as hereinafter defined, in which case the sum to be paid to the Contractor therefor shall be determined and paid in accordance with Sub-Clause 59.4.
Production of 58.3 The Contractor shall produce to the Engineer all quotations, invoices, vouchers and accounts or receipts in connection with expenditure in respect of Provisional Vouchers Sums, except where work is valued in accordance with rates or prices set out in the
Tender.
Nominated Subcontractors Definition of 59.1 All specialists, merchants, tradesmen and others executing any work or supplying any goods, materials, Plant or services for which Provisional Sums are included "Nominated in the Contract, who may have been or be nominated or selected or approved by Subcontractors"
the Employer or the Engineer, and all persons to whom by virtue of the provisions of the Contract the Contractor is required to subcontract shall, in the execution of such work or the supply of such goods, materials, Plant or services,
be deemed to be subcontractors to the Contractor and are referred to in this Contract as "nominated Subcontractors". Nominated 59.2 The Contractor shall not be required by the Employer or the Engineer, or be deemed to be under any obligation, to employ any nominated Subcontractor Subcontractors; against whom the Contractor may raise reasonable objection, or who declines to Objection to enter into a subcontract with the Contractor containing provisions: Nomination (a) that in respect of the work, goods, materials, Plant or services the subject of the subcontract, the nominated Subcontractor will undertake towards the Contractor such obligations and liabilities as will enable the Contractor to discharge his own obligations and liabilities towards the Employer under the terms of the Contract and will save harmless and indemnify the Contractor from and against the same and from all claims, proceedings, damages, costs, charges and expenses whatsoever arising out of or in connection therewith, or arising out of or in connection with any failure to perform such obligations or to fulfil such liabilities, and
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2cs
(b) that the nominated Subcontractor will save harmless and indemnify the Contractor from and against any negligence by the nominated Subcontractor, his agents, workmen and servants and from and against any misuse by him or them
of any Temporary Works provided by the Contractor for the purposes of the Contract and from all claims as aforesaid.
Design 59.3 If in connection with any Provisional Sum the services to be provided include any matter of design or specification of any part of the Permanent Works or of any Requirements to be Expressly Plant to be incorporated therein, such requirement shall be expressly stated in the Contract and shall be included in any nominated Subcontract. The. nominated Stated Subcontract shall specify that the nominated Subcontractor providing such services will save harmless and indemnify the Contractor from and against the same and from all claims, proceedings, damages, costs, charges and expenses whatsoever arising out of or in connection with any failure to perform such obligations or to fulfil such liabilities.
Payments to 59.4 For all work executed or goods, materials, Plant or services supplied by any nominated Subcontractor, the Contractor shall be entitled to: Nominated Subcontractors (a) the actual price paid or due to be paid by the Contractor, on the instructions of the Engineer, and in accordance with the subcontract; (b) in respect of labour supplied by the Contractor, the sum, if any, entered in the Bill of Quantities or, if instructed by the Engineer pursuant to paragraph (a) of Sub-Clause 58.2, as may be determined in accordance with Clause 52;
(c) in respect of all other charges and profit, a sum being a percentage rate of the actual price paid or due to be paid calculated, where provision has been made in the Bill of Quantities for a rate to be set against the relevant Provisional Sum, at the rate inserted by the Contractor against that item or, where no such provision has been made, at the rate inserted by the Contractor in the Appendix to Tender and repeated where provision for such is made in a special item provided in the Bill of Quantities for such purpose.
Certification of Payments to Nominated
Subcontractors
59.5
Before issuing, under Clause 60, any certificate, which includes any payment in respect
of work done or goods, materials, Plant or services supplied by any
nominated Subcontractor, the Engineer shall be entitled to demand from the
Contractor reasonable proof that all payments, less retentions, included in previous certificates in respect of the work or goods, materials, Plant or services
of such nominated Subcontractor have been paid or discharged by the Contractor. If the Contractor fails to supply such proof then, unless the Contractor (a) satisfies the Engineer in writing that he has reasonable cause for withholding or refusing to make such payments and
(b) produces to the Engineer reasonable proof that he has so informed such nominated Subcontractor in writing, the Employer shall be entitled to pay to such nominated Subcontractor direct, upon the certificate of the Engineer, all payments, less retentions, provided for in
the nominated Subcontract, which the Contractor has failed to make to such nominated Subcontractor and to deduct by way of set-off the amount so paid by the Employer from any sums due or to become due from the Employer to the Contractor. Provided that, where the Engineer has certified and the Employer has paid direct as aforesaid, the Engineer shall, in issuing any further certificate in favour of the
Contractor, deduct from the amount thereof the amount so paid, direct as aforesaid, but shall not withhold or delay the issue of the certificate itself when due to be issued under the terms of the Contract.
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Certificates and Payment Monthly 60.1 The Contractor shall submit to the Engineer after the end of each month six Statements copies, each signed by the Contractor's representative approved by the Engineer
in accordance with Sub-Clause 15.1, of a statement, in such form as the Engineer may from time to time prescribe, showing the amounts to which the Contractor considers himself to be entitled up to the end of the month in respect of
(a) the value of the Permanent Works executed
(b) any other items in the Bill of Quantities including those for Contractor's Equipment, Temporary Works, dayworks and the like (c) the percentage of the invoice value of listed materials, all as stated in the Appendix to Tender, and Plant delivered by the Contractor on the Site for incorporation in the Permanent Works but not incorporated in such Works (d) adjustments under Clause 70 (e) any other sum to which the Contractor may be entitled under the Contract. Monthly Payments 60.2 The Engineer shall, within 28 days of receiving such statement, certify to the Employer the amount of payment to the Contractor which he considers due and payable in respect thereof, subject: (a) firstly, to the retention of the amount calculated by applying the Percentage of
Retention stated in the Appendix to Tender, to the amount to which the Contractor is entitled under paragraphs (a), (b), (c) and (e) of Sub-Clause 60.1 until the amount so retained reaches the Limit of Retention Money stated in the Appendix to Tender, and (b) secondly, to the deduction, other than pursuant to Clause 47, of any sums which may have become due and payable by the Contractor to the Employer. Provided that the Engineer shall not be bound to certify any payment under this Sub-Clause if the net amount thereof, after all retentions and deductions, would be less than the Minimum Amount of Interim Certificates stated in the Appendix to Tender. Notwithstanding the terms of this Clause or any other Clause of the Contract no
amount will be certified by the Engineer for payment until the performance
Payment of 60.3
Retention Money
security, if required under the Contract, has been provided by the Contractor and approved by the Employer. (a) Upon the issue of the Taking-Over Certificate with respect to the whole of the Works, one half of the Retention Money, or upon the issue of a Taking-Over Certificate with respect to a Section or part of the Permanent Works only such proportion thereof as the Engineer determines havingregard to the relative value of such Section or part of the Permanent Works, shall be certified by the Engineer
for payment to the Contractor.
(b) Upon the expiration of the Defects Liability Period for the Works the other half of the Retention Money shall be certified by the Engineer for payment to the Contractor. Provided that, in the event of different Defects Liability Periods having become applicable to different Sections or parts of the Permanent Works
pursuant to Clause 48, the expression "expiration of the Defects Liability Period" shall, for the purposes of this Sub-Clause, be deemed to mean the expiration of the latest of such periods. Provided also that if at such time, there shall remain to be executed by the Contractor any work ordered, pursuant to Clauses 49 and 50, in respect of the Works, the Engineer shall be entitled to withhold certification untilcompletion of such work of so much of the balance of the Retention Money as shall, in the opinion of the Engineer, represent the cost of the work remaining to be executed.
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Correction of 60.4 The Engineer may by any interim certificate make any correction or modification Certificates in any previous certificate which shall have been issued by him and shall hav authority, if any work is not being carried out to his satisfaction, to omit or reduce the value of such work in any interim certificate.
Statement at 60.5 Not later than 84 days after the issue of the Taking-Over Certificate in respect of the whole of the Works, the Contractor shall submit to the Engineer a Statement Completion at Completion with supporting documents showing in detail, in the form approved by the Engineer, (a) the final value of all work done in accordance with the Contract up to the date stated in such Taking-Over Certificate (b) any further sums which the Contractor considers to be due and
(c) an estimate of amounts which the Contractor considers will become due to him under the Contract.
The estimated amounts shall be shown separately in such Statement at Completion. The Engineer shall certify payment in accordance with Sub-Clause 60.2.
Final Statement 60.6 Not later than 56 days after the issue of the Defects Liability Certificate pursuant to Sub-Clause 62.1, the Contractor shall submit to the Engineer for consideration a draft final statement with supporting documents showing in detail, in the form approved by the Engineer, (a) the value of all work done in accordance with the Contract and
(b) any further sums which the Contractor considers to be due to him under the Contract.
If the Engineer disagrees with or cannot verify any part of the draft final statement, the Contractor shall submit such further information as the Engineer may reasonably require and shall make such changes in the draft as may be agreed between them. The Contractor shall then prepare and submit to the Engineer the final statement as agreed (for the purposes of these Conditions referred to as the "Final Statement").
Discharge 60.7 Upon submission of the Final Statement, the Contractor shall give to the Employer, with a copy to the Engineer, a written discharge confirming that the total of the Final Statement represents full and final settlement of all monies due to the Contractor arising out of or in respect of the Contract. Provided that such
discharge shall become effective only after payment due under the Final Certificate issued pursuant to Sub-Clause 60.8 has been made and the performance security referred to in Sub-Clause 10.1, if any, has been returned to the Contractor.
Final Certificate 60.8 Within 28 days after receipt of the Final Statement, and the written discharge, the Engineer shall issue to the Employer (with a copy to the Contractor) a Final Certificate stating (a) the amount which, in the opinion of the Engineer, is finally due under the Contract, and (b) after giving credit to the Employer for all amounts previously paid by the Employer and for all sums to which the Employer is entitled under the Contract,
other than Clause 47, the balance, if any, due from the Employer to the Contractor or from the Contractor to the Employer as the case may be.
Cessation of 60.9 The Employer shall not be liable to the Contractor for any matter or thing arising out of or in connection with the Contract or execution of the Works, unless the Employer's Contractor shall have included a claim in respect thereof in his Final Statement Liability
and (except in respect of matters or things arising after the issue of the
Taking-Over Certificate in respect of the whole of the Works) in the Statement at Completion referred to in Sub-Clause 60.5.
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Time for Payment 60.10 The amount due to the Contractor under any interim certificate issued by the Engineer pursuant to this Clause, or to any other term of the Contract, shall, subject to Clause 47, be paid by the Employer to the Contractor within 28 days after such interim certificate has been delivered to the Employer, or, in the case of the Final Certificate referred to in Sub-Clause 60.8, within 56 days, after such Final Certificate has been delivered to the Employer. In the event of the failure of the Employer to make payment within the times stated, the Employer shall pay to the Contractor interest at the rate stated in the Appendix to Tender upon all sums unpaid from the date by which the same should have been paid. The provisions of
this Sub-Clause are without prejudice to the Contractor's entitlement under Clause 69.
Approval only by 61 .1 Detects Liability
Only the Defects Liability Certificate, referred to in Clause 62, shall be deemed to constitute approval of the Works.
Certificate
Defects Liability
62.1 The Contract shall not be considered as completed until a Defects Liability
Certificate
Unfulfilled
Obligations
Certificate shall have been signed by the Engineer and delivered to the Employer, with a copy to the Contractor, stating the date on which the Contractor shall have
completed his obligations to execute and complete the Works and remedy any defects therein to the Engineer's satisfaction. The Defects Liability Certificate shall be given by the Engineer within 28 days after the expiration of the Defects Liability Period, or, if different defects liability periods shall become applicable to different Sections or parts of the Permanent Works, the expiration of the latest such period, or as soon thereafter as any works instructed, pursuant to Clauses 49 and 50, have been completed to the satisfaction of the Engineer. Provided that the issue of the Defects Liability Certificate shall not be a condition precedent to payment to the Contractor of the second portion of the Retention Money in accordance with the conditions set out in Sub-Clause 60.3. 62.2 Notwithstanding the issue of the Defects Liability Certificate the Contractor and the Employer shall remain liable for the fulfilmnt of any obligation incurred under the provisions of the Contract prior to the issue of the Defects Liability
Certificate which remains unperformed at the time such Defects Liability Certificate is issued and, for the purposes of determining the nature and extent of any such obligation, the Contract shall be deemed to remain in force between the
parties to the Contract.
Remedies Default of 63.1 Contractor
If the Contractor is deemed by law unable to pay his debts as they fall due, or enters into voluntary or involuntary bankruptcy, liquidation or dissolution (other
than a voluntary liquidation for the purposes of amalgamation or
reconstruction), or becomes insolvent, or makes an arrangement with, or assignment in favour of, his creditors, or agrees to carry out the Contract under a committee of inspection of his creditors, or if a receiver, administrator, trustee or liquidator is appointed over any substantial part of his assets, or if, under any law or regulation relating to reorganization, arrangement or readjustment of debts,
proceedings are commenced against the Contractor or resolutions passed in
connection with dissolution or liquidation or if any steps are taken to enforce any security interest over a substantial part of the assets of the Contractor, or if any
act is done or event occurs with respect to the Contractor or his assets which, under any applicable law has a substantially similar effect to any of the foregoing
acts or events, or if the Contractor has contravened Sub-Clause 3.1, or has an execution levied on his goods, or if the Engineer certifies to the Employer, with a
copy to the Contractor, that, in his opinion, the Contractor: (a) has repudiated the Contract, or (b) without reasonable excuse has failed (i) to commence the Works in accordance with Sub-Clause 41.1, or
© FIDIC 1987
(ii) to proceed with the Works, or any Section thereof, within 28 days after receiving notice pursuant to Sub-Clause 46.1, or (c) has failed to comply with a notice issued pursuant to Sub-Clause 37.4 or an
instruction issued pursuant to Sub-Clause 39.1 within 28 days after having received it, or
(d) despite previous warning from the Engineer, in writing, is otherwise persistently or flagrantly neglecting to comply with any of his obligations under the Contract, or (e) has contravened Sub-Clause 4.1, then the Employer may, after giving 14 days' notice to the Contractor, enter upon the Site and the Works and terminate the employment of the Contractor without thereby releasing the Contractor from any of his obligations or liabilities under the Contract, or affecting the rights and authorities conferred on the Employer or
the Engineer by the Contract, and may himself complete the Works or may employ any other contractor to complete the Works. The Employer or such other contractor may use for such completion so much of the Contractor's Equipment, Temporary Works and materials as he or they may think proper.
Valuation at Date 63.2 The Engineer shall, as soon as may be practicable after any such entry and termination by the Employer, fix and determine ex parte, or by or after reference of Termination to the parties or after such investigation or enquiries as he may think fit to make or institute, and shall certify: (a) what amount (if any) had, at the time of such entry and termination, been reasonably earned by or would reasonably accrue to the Contractor in respect of work then actually done by him under the Contract, and
(b) the value of any of the said unused or partially used materials, any Payment after Termination
Assignment of Benefit of Agreement
Contractor's Equipment and any Temporary Works. 63.3 If the Employer terminates the Contractor's employment under this Clause, he shall
not be liable to pay to the Contractor any further amount (including
damages) in respect of the Contract until the expiration of the Defects Liability Period and thereafter until the costs of execution, completion and remedying of any defects, damages for delay in completion (if any) and all other expenses incurred by the Employer have been ascertained and the amount thereof certified by the Engineer. The Contractor shall then be entitled to receive only such sum (if any) as the Engineer may certify would have been payable to him upon due completion by him after deducting the said amount. If such amount exceeds the sum which would have been payable to the Contractor on due completion by him, then the Contractor shall, upon demand, pay to the Employer the amount of such excess and it shall be deemed a debt due by the Contractor to the Employer and shall be recoverable accordingly. 63.4 Unless prohibited by law, the Contractor shall, if so instructed by the Engineer within 14 days of such entry and termination referred to in Sub-Clause 63.1, assign to the Employer the benefit of any agreement for the supply of any goods or materials or services and/or for the execution of any work for the purposes of the Contract, which the Contractor may have entered into.
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Urgent Remedial 64.1 Work
If, by reason of any accident, or failure, or other event occurring to, in, or in connection with the Works, or any part thereof, either during the execution of the
Works, or during the Defects Liability Period, any remedial or other work is, in the opinion of the Engineer, urgently necessary for the safety of the Works and the Contractor is unable or unwilling at once to do such work, the Employer shall
be entitled to employ and pay other persons to carry out such work as the Engineer may consider necessary. If the work or repair so done by the Employer is work which, in the opinion of the Engineer, the Contractor was liable to do at his own cost under the Contract, then all costs consequent thereon or incidental
thereto shall, after due consultation with the Employer and the Contractor, be determined by the Engineer and shall be recoverable from the Contractor by the Employer, and may be deducted by the Employer from any monies due or to become due to the Contractor and the Engineer shall notify the Contractor accordingly, with a copy to the Employer. Provided that the Engineer shall, as
soon after the occurrence of any such emergency as may be reasonably practicable, notify the Contractor thereof.
Special Risks No Liability for 65.1 The Contractor shall be under no liability whatsoever in consequence of any of Special Risks
the special risks referred to in Sub-Clause 65.2, whether by way of indemnity or
otherwise, for or in respect of:
(a) destruction of or damage to the Works, save to work condemned under the provisions of Clause 39 prior to the occurrence of any of the said special risks, or (b) destruction of or damage to property, whether of the Employer or third parties, or (c) injury or loss of life. Special Risks 65.2 The special risks are: (a) the risks defined under paragraphs (a), (c), (d) and (e) of Sub-Clause 20.4, and
(b) the risks defined under paragraph (b) of Sub-Clause 20.4 insofar as these relate to the country in which the Works are to be executed.
Damage to Works 65.3 If the Works or any materials or Plant on or near or in transit to the Site, or any of by Special Risks
the Contractor's Equipment, sustain destruction or damage by reason of any of
the said special risks, the Contractor shall be entitled to payment in accordance with the Contract for any Permanent Works duly executed and for any materials or Plant so destroyed or damaged and, so far as may be required by the Engineer or as may be necessary for the completion of the Works, to payment for: (a) rectifying any such destruction or damage to the Works, and (b) replacing or rectifying such materials or Contractor's Equipment and the Engineer shall determine an addition to the Contract Price in accordance with Clause 52 (which shall in the case of the cost of replacement of Contractor's Equipment include the fair market value thereof as determined by the Engineer) and shall notify the Contractor accordingly, with a copy tothe Employer.
Projectile, Missile 65.4 Destruction, damage, injury or loss of life caused by the explosion or impact, whenever and wherever occurring, of any mine, bomb, shell, grenade, or other projectile, missile, munition, or explosive of war, shall be deemed to be a consequence of the said special risks.
© FIDIC 987
Increased Costs 65.5 Save to the extent that the Contractor is entitled to payment under any other provision of the Contract, the Employer shall repay to the Contractor any costs arising from of the execution of the Works (other than such as may be attributable to the cost Special Risks of reconstructing work condemned under the provisions of Clause 39 prior to the occurrence of any special risk) which are howsoever attributable to or consequent on or the result of or in any way whatsoever connected with the said special risks, subject however to the provisions in this Clause hereinafter contained in regard to outbreak of war, but the Contractor shall, as soon as any such cost comes to his knowledge, forthwith notify the Engineer thereof. The Engineer shall, after due consultation with the Employer and the Contractor, determine the amount of the Contractor's costs in respect thereof which shall be added to the Contract Price and shall notify the Contractor accordingly, with a copy to the Employer.
Outbreak of War 65.6 If, during the currency of the Contract, there is an outbreak of war, whether war is declared or not, in any part of the world which, whether financially or otherwise, materially affects the execution of the Works, the Contractor shall, unless and until the Contract is terminated under the provisions of this Clause, continue to use his best endeavours to complete the execution of the Works. Provided that the Employer shall be entitled, at any time after such outbreak of war, to terminate the Contract by giving notice to the Contractor and, upon such notice being given, the Contract shall, except as to the rights of the parties under this Clause and to the operation of Clause 67, terminate, but without prejudice to the rights of either party in respect of any antecedent breach thereof.
Removal of 65.7 If the Contract is terminated under the provisions of Sub-Clause 65.6, the Contractor's Contractor shall, with all reasonable dispatch, remove from the Site all Equipment on Termination
Contractor's Equipment and shall give similar facilities to his Subcontractors to do so.
Payment if 65.8 If the Contract is terminated as aforesaid, the Contractor shall be paid by the Contract Employer, insofar as such amounts or items have not already been covered by Terminated payments on account made to the Contractor, for all work executed prior to the date of termination at the rates and prices provided in the Contract and in addition: (a) The amounts payable in respect of any preliminary items referred to in the Bill of Quantities, so far as the work or service comprised therein has been carried out
or performed, and a proper proportion of any such items which have been partially carried out or performed. (b) The cost of materials, Plant or goods reasonably ordered for the Works which have been delivered to the Contractor or of which the Contractor is legally liable to accept delivery, such materials, Plant or goods becoming the property of the Employer upon such payments being made by him.
(c) A sum being the amount of any expenditure reasonably. incurred by the Contractor in the expectation of completing the whole of the Works insofar as such expenditure has not been covered by any other payments referred to in this Sub-Clause.
(d) Any additional sum payable under the provisions of Sub-Clauses 65.3 and 65.5.
(e) Such proportion of the cost as may be reasonable, taking into account payments made or to be made for work executed, of removal of Contractor's Equipment under Sub-Clause 65.7 and, if required by the Contractor, return thereof to the Contractor's main plant yard in his country of registration or to other destination, at no greater cost. (f) The reasonable cost of repatriation of all the Contractor's staff and workmen employed on or in connection with the Works at the time of such termination.
© FIDIC 1987
Provided that against any payment due from the Employer under this Sub-Clause, the Employer shall be entitled to be credited with any outstanding
balances due from the Contractor for advances in respect of Contractor's Equipment, materials and Plant and any other sums which, at the date of termination, were recoverable by the Employer from the Contractor under the terms of the Contract. Any sums payable under this Sub-Clause shall, after due
consultation with the Employer and the Contractor, be determined by the Engineer who shall notify the Contractor accordingly, with a copy to the Employer.
Release from Performance Payment in Event of Release from
Performance
66.1
If any circumstance outside the control of both parties arises after the issue of the Letter of Acceptance which renders it impossible or unlawful for either party to
fulfil his contractual obligations, or under the law governing the Contract the parties are released from further performance, then the sum payable by the
Employer to the Contractor in respect of the work executed shall be the same as that which would have been payable under Clause 65 if the Contract had been terminated under the provisions of Clause 65.
Settlement of Disputes Engineer's 67.1 If a dispute of any kind whatsoever arises between the Employer and the Contractor in connection with, or arising out of, the Contract or the execution of Decision the Works, whether during the execution of the Works or after their completion and whether before or after repudiation or other termination of the Contract, including any dispute as to any opinion, instruction, determination, certificate or
valuation of the Engineer, the matter in dispute shall, in the first place, be
referred in writing to the Engineer, with a copy to the other party. Such reference shall state that it is made pursuant to this Clause. No later than the eighty-fourth day after the day on which he received such reference the Engineer shall give notice of his decision to the Employer and the Contractor. Such decision shall state that it is made pursuant to this Clause.
Unless the Contract has already been repudiated or terminated, the Contractor shall, in every case, continue to proceed with the Works with all due diligence and the Contractor and the Employer shall give effect forthwith to every such decision of the Engineer unless and until the same shall be revised, as hereinafter provided, in an amicable settlement or an arbitral award.
If either the Employer or the Contractor be dissatisfied with any decision of the Engineer, or if the Engineer fails to give notice of his decision on or before the eighty-fourth day after the day on which he received the reference, then either the Employer or the Contractor may, on or before the seventieth day after the day on which he received notice of such decision, or on or before the seventieth day after the day on which the said period of 84 days expired, as the case may be, give notice to the other party, with a copy for information to the Engineer, of his intention to commence arbitration, as hereinafter provided, as to the matter in dispute. Such notice shall establish the entitlement of the party giving the same to commence arbitration, as hereinafter provided, as to such dispute and, subject to Sub-Clause 67.4, no arbitration in respect thereof may be commenced unless such notice is given.
If the Engineer has given notice of his decision as to a matter in dispute to the Employer and the Contractor and no notice of intention to commence arbitration as to such dispute has been given by either the Employer or the Contractor on or before the seventieth day after the day on which the parties received notice as to such decision from the Engineer, the said decision shall become final and binding upon the Employer and the Contractor.
© FIDIC 1987
Amicable 67.2 Where notice of intention to commence arbitration as to a dispute has been given in accordance with Sub-Clause 67.1, arbitration of such dispute shall not be Settlement commenced unless an attempt has first been made by the parties to settle such dispute amicably. Provided that, unless the parties otherwise agree, arbitration may be commenced on or after the fifty-sixth day after the day on which notice of intention to commence arbitration of such dispute was given, whether or not any attempt at amicable settlement thereof has been made.
Arbitration 67.3 Any dispute in respect of which: (a) the decision, if any, of the Engineer has not become final and binding pursuant to Sub-Clause 67.1, and
(b) amicable settlement has not been reached within the period stated in Sub-Clause 67.2 shall be finally settled, unless otherwise specified in the Contract, under the Rules
of Conciliation and Arbitration of the International Chamber of Commerce by one or more arbitrators appointed under such Rules. The said arbitrator/s shall have full power to open up, review and revise any decision, opinion, instruction, determination, certificate or valuation of the Engineer related to the dispute. Neither party shall be limited in the proceedings before such arbitrator/s to the evidence or arguments put before the Engineer for the purpose of obtaining his said decision pursuant to Sub-Clause 67.1. No such decision shall disqualify the
Engineer from being called as a witness and giving evidence before the arbitrator/s on any matter whatsoever relevant to the dispute.
Arbitration may be commenced prior to or after completion of the Works, provided that the obligations of the Employer, the Engineer and the Contractor shall not be altered by reason of the arbitration being conducted during the progress of the Works.
Failure to Comply 67.4 with Engineer's
Decision
Where neither the Employer nor the Contractor has given notice of intention to commence arbitration of a dispute within the period stated in Sub-Clause 67.1 and the related decision has become final and binding, either party may, if the other party fails to comply with such decision, and without prejudice to any other rights it may have, refer the failure to arbitration in accordance with Sub-Clause 67.3. The provisions of Sub-Clauses 67.1 and 67.2 shall not apply to any such reference.
Notices Notice to 68.1 All certificates, notices or instructions to be given to the Contractor by the
Contractor
Employer or the Engineer under the terms of the Contract shall be sent by post,
cable, telex or facsimile transmission to or left at the Contractor's principal place
of business or such other address as the Contractor shall nominate fur that purpose.
Notice to Employer and Engineer
68.2 Any notice to be given to the Employer or to the Engineer under the terms of the Contract shall be sent by post, cable, telex or facsimile transmission to or left at
the respective addresses nominated for that purpose in Part H of these Conditions.
Change of 68.3 Either party may change a nominated address to another address in the country where the Works are being executed by prior notice to the other party, with a copy Address to the Engineer, and the Engineer may do so by prior notice to both parties.
© FIDIC 1987
Default of Employer Default of 69.1 In the event of the Employer: Employer
(a) failing to pay to the Contractor the amount due under any certificate of the
Engineer within 28 days after the expiry of the time stated in Sub-Clause 60.10 within which payment is to be made, subject to any deduction that the Employer is entitled to make under the Contract, or (b) interfering with or obstructing or refusing any required approval to the issue of any such certificate or
(c) becoming bankrupt or, being a company, going into liquidation, other than for the purpose of a scheme of reconstruction or amalgamation, or (d) giving notice to the Contractor that for unforeseen reasons, due to economic
dislocation, it is impossible for him to continue to meet his contractual obligations the Contractor shall be entitled to terminate his employment under the Contract by giving notice to the Employer, with a copy to the Engineer. Such termination shall take effect 14 days after the giving of the notice.
Removal of 69.2 Upon the expiry of the 14 days' notice referred to in Sub-Clause 69.1, the Contractor shall, notwithstanding the provisions of Sub-Clause 54.1, with all
Contractor's Equipment
Payment on Termination
reasonable despatch, remove from the Site all Contractor's Equipment brought
by him thereon.
69.3 In the event of such termination the Employer shall be under the same obligations to the Contractor in regard to payment as if the Contract had been terminated
under the provisions of Clause 65, but, in addition to the payments specified in Sub-Clause 65.8, the Employer shall pay to the Contractor the amount of any loss
or damage to the Contractor arising out of or in connection with or by consequence of such termination.
Contractor's 69.4 Without prejudice to the Contractor's entitlement to interest under Sub-Clause
Entitlement to
Suspend Work
60.10 and to terminate under Sub-Clause 69.1, the Contractor may, if the Employer fails to pay the Contractor the amount due under any certificate of the Engineer within 28 days after the expiry of the time stated in Sub-Clause 60.10
within which payment is to be made, subject to any deduction that the Employer is entitled to make under the Contract, after giving 28 days' prior notice to the Employer, with a copy to the Engineer, suspend work or reduce the rate of work.
If the Contractor suspends work or reduces the rate of work in accordance with the provisions of this Sub-Clause and thereby suffers delay or incurs cost the Engineer shall, after due consultation with the Employer and the Contractor, determine (a) any extension of time to which the Contractor is entitled under Clause 44, and
(b) the amount of such costs, which shall be added to the Contract Price, and shall notify the Contractor accordingly, with a copy to the Employer.
Resumption 69.5 of Work
Where the Contractor suspends work or reduces the rate of work, having given notice in accordance with Sub-Clause 69.4, and the Employer subsequently pays
the amount due, including interest pursuant to Sub-Clause 60.10, the Contractor's entitlement under Sub-Clause 69.1 shall, if notice of termination has not been given, lapse and the Contractor shall resume normal working as soon as is reasonably possible.
Changes in Cost and Legislation Increase or 70.1 There shall be added to or deducted from the Contract Price such sums in respect Decrease of rise or fall in the cost of labour and/or materials or any other matters affecting of Cost the cost of the execution of the Works as may be determined in accordance with Part II of these Conditions.
FIDIC 1987
Subsequent 70.2 If, after the date 28 days prior to the latest date for submission of tenders for the Contract there occur in the country in which the Works are being or are to be Legislation
executed changes to any National or State Statute, Ordinance, Decree or other Law or any regulation or bye-law of any local or other duly constituted authority,
or the introduction of any such State Statute, Ordinance, Decree, Law,
regulation or bye-law which causes additional or reduced cost to the Contractor,
other than under Sub-Clause 70.1, in the execution of the Contract, such additional or reduced cost shall, after due consultation with the Employer and the
Contractor, be determined by the Engineer and shall be added to or deducted
from the Contract Price and the Engineer shall notify the Contractor accordingly, with a copy to the Employer.
Currency and Rates of Exchange Currency 71 .1 Restrictions
If, after the date 28 days prior to the latest date for submission of tenders for the Contract, the Government or authorised agency of the Government of the country in which the Works are being or are to be executed imposes currency restrictions and/or transfer of currency restrictions in relation to the currency or currencies in which the Contract Price is to be paid, the Employer shall reimburse any loss or damage to the Contractor arising therefrom, without prejudice to the right of the Contractor to exercise any other rights or remedies to which he is entitled in such event.
Rates of 72.1 Where the Contract provides for payment in whole or in part to be made to the Exchange
Contractor in foreign currency or currencies, such payment shall not be subject to variations in the rate or rates of exchange between such specified foreign currency
or currencies and the currency of the country in which the Works are to be executed.
Currency Proportions
72.2 Where the Employer has required the Tender to be expressed in a single currency but with payment to be made in more than one currency and the Contractor has stated the proportions or amounts of other currency or currencies in which he
requires payment to be made, the rate or rates of exchange applicable for calculating the payment of such proportions or amounts shall, unless otherwise stated in Part II of these Conditions, be those prevailing, as determined by the Central Bank of the country in which the Works are to be executed, on the date 28 days prior to the latest date for the submission of tenders for the Contract, as has
been notified to the Contractor by the Employer prior to the submission of tenders or as provided for in the Tender.
Currencies of 72.3 Where the Contract provides for payment in more than one currency, the proportions or amounts to be paid in foreign currencies in respect of Provisional Payment for Provisional Sums Sums shall be determined in accordance with the principles set forth in Sub-Clauses 72.1 and 72.2 as and when these sums are utilised in whole or in part in accordance with the provisions of Clauses 58 and 59.
REFERENCE TO PART II As stated in the Foreword at the beginning of this document, the FIDIC
Conditions comprise both Part I and Part II. Certain Clauses, namely Sub-Clauses 1.1 paragraph (a) (i) and (iv), 5.1 part 14.1, 14.3, 68.2 and 70.1 must
include additional wording in Part II for the Conditions to be complete. Other
Clauses may require additional wording to supplement Part I or to cover particular circumstances or the type of work (dredging is an example).
Part II Conditions of Particular Application with guidelines for the preparation of Part II are printed in a separately bound document.
© FIDIC 1987
PART I — GENERAL CONDITIONS
Index Access to Site Access to Works, Engineer Access, Contractor to Satisfy Himself Accident or Injury to Workmen — Insurance Against Accident or Injury to Workmen — Liability for Address, Change of Adequacy of Insurance Adjustment of Contract Price if Variations Exceed 15 per cent of Tender Sum Adverse Physical Obstructions or Conditions
Clause
Page
42.1 37.1 11.1
198 196
24.2
192
24.1
187 192
68.3 25.2 52.3 12.2 9.1 51. &52. 5.2 67.2 2.4
216
7.3 54.8
186 206
61.1
211
67.3 3.1
216
30.1
194
Bills of Quantities — Estimated Only Boreholes and Exploratory Excavation Breakdown of Lump Sum Items
55.1 18.1
206 189 207
Careof Works Cash Flow Estimate to be Submitted Certificate, Final Certificates and Payment, Monthly Statements Certificates, Correction of Certificate, Taking-Over Certification of Completion of Works Certification of Completion of Sections or Parts Cessation of Employer's Liability Change of Address, Notice of Claims, Contemporary Records Claims, Notice of Claims, Payment of Claims, Substantiation of Claims Under Performance Security Clearance of Site on Completion Commencement of Works Completion of Works, Time for Completion of Works, Time for, Extension of Completion, Statement at Compliance with Insurance Policy Conditions Compliance with Statutes and Regulations Contemporary Records for Claims Contract Agreement
20.1
Agreement
Alterations, Additions and Omissions Ambiguities in Contract Documents Amicable Settlement of Disputes
Appointment of Assistants to Engineer Approval by the Engineer Approval of Materials not Implied Approval Only by Defects Liability Certificate Arbitration Assignment of Contract Avoidance of Damage to Roads
Contractor Not Relieved of Duties or Responsibilities Contractor's Employees Contractor's Employees, Engineer at Liberty to Object Contractor's Entitlement to Suspend Work for Employer's Default Contractor's Equipment, Conditions of Hire Contractor's Equipment, Employer not Liable for Damage
57.2 14.3
60.8 60.1 60.4 48.1 48.1
48.2 60.9 68.3 53.2 53.1
53.5 53.3 10.3 33.1 41.1 43.1 44.1
60.5 25.4 26.1 53.2 9.1
192
203 187
186 202 203 185
216 183
184
189 188 210 209 210 201 201
201
210 216 204 204 205 205 187 195 198 199 199
210 192 193
204
16.2
186 188 188 188
69.4
217
14.4 16.1
54.5 54.2
206
205
Q2tO1
Index Contractor's Equipment, Insurance of Contractor's Equipment, Reference in Subcontracts Contractor's Equipment, Temporary Works and Materials; Exclusive Use for the Works Contractor's Equipment, Transport of Contractor's Failure to Carry Out Instructions
Clause Page
54.7
190 206
54.1
205
21.1
30.2
194
202
Contraor's Failure to Insure, Remedy
25.3
192
Contractor's General Responsibilities Contractor's Superintendence Contractor to Keep Site Clear Contractor to Search Correction of Certificates Cost of Remedying Defects Cost of Samples Cost of Tests Cost of Tests not Provided for Covering up Work, Examination Before Cross Liabilities
8.1 15.1 32.1 50.1 60.4
195 202
Currencies of Payment for Provisional Sums Currencies, Rates of Exchange Currency Restrictions Custody and Supply of Drawings and Documents Customs Clearance Damage to Persons and Property Damage to Roads, Avoidance of Damage to Works, Special Risks Damages, Liquidated Dates for Inspection and Testing
Daywork Decrease or
Increase of Costs Default of Contractor in Compliance with Instructions on Improper Work Default of Contractor, Remedies for Default of Employer Defective Materials and Work Defects, Contractor to Search for, if Required Defects, Cost of Remedying Defects Liability Certificate Defects Liability Period Defects, Remedying of Definitions Delay, Liquidated Damages for Delays and Cost of Delay of Drawings Design by Nominated Subcontractors Discharge Discrepancies in Documents Dismissal of Contractor's Employees
Disorderly Conduct, etc. Disputes, Engineer's Decision Disruption of Progress Documents Mutually Explanatory Drawings Drawings and Documents — Custody and Supply of Drawings and Instructions — Supplementary Drawings, Copy to be Kept on Site Drawings, Delays and Cost of Delay of Drawings Drawings, Failure by Contractor to Submit
Employer not Liable for Damage to Contractor's Equipment etc.
36.2 36.3 36.4 38.1
23.3 72.3 72.1
71.1 6.1
186 188 21 0 202
195 195
196 197 192
218 218 218 185
54.3 205 22.1 30.1
191
65.3
39.2
213 206 196 204 217 197
63.1
211
69.1 39.1
217 197
50.1
202
62.1 49.1
201
1.1 47.1
200
47.1
37.3 52.4 70.1
194
49.3 202 211
49.2 202 181
6.4 ,
185
5.2
185 188 195
59.3 208 60.7 210 16.2 34.1 67.1
215
6.3 5.2
185 185 6&7 185,186 6.1 185 7.1 186 6.2 185 6.4 185 6.5 186 54.2
205
Index Employer's Liability, Cessation of Employer's Responsibilities Employer's Risks Engagement of Staff and Labour Engineer's Authority to Delegate Engineer's Determination Where Tests not Provided for Engineer's Duties and Authority Engineer to Act Impartially Environment — Protection of Errors in Setting Out Evidence and Terms of Insurance
Examination of Work before Covering Up
Clause Page 60.9 19.2 20.4 34.1 2.3 36.5
210 189 190
2.1
183 184 189 189 192 197
2.6 19.1
17.1 25.1 38.1
195 183 196
Exceptions Exchange, Rates of Exclusions Extension of Time, due to Employer's Failure to give Possession of Site Extension of Time for Completion Extension of Time for Completion, Contractor's Claim Extension of Time for Completion, Engineer's Determination
22.2
191
72.1
218
21.4 42.2
191
44.1
199
Extraordinary Traffic
30.
Facilities for Other Contractors Failure by Contractor to Submit Drawings Failure to Comply with Claims Procedure Failure to Comply with Engineer's Decision
31.2 194
199
44.2 199 44.3 200 6.5
194 186
Failure to Give Possession of Site
53.4 205 67.4 216 42.2 199
Faulty Work, Removal of
39.1
Fees and Notices
26.1 19.1
Fencing, Watching, Lighting, etc. Final Certificate
197 193 189
Final Statement
60.8 210 60.6 210
Foreign Currencies. Payment in Fossils Foundations, Examination of
72. 27.1 38.1
218 193
General Responsibilities of Contractor Giving of Notices — Payment of Fees
8.1 26.1
186 193
1.2
182
39.1 70.1 22.1
197 218
&24.1 22.3 37.5
192 192 197
22.1 24.1
191
Headings and Marginal Notes
Improper Work and Materials, Removal of Increase or Decrease of Costs
Indemnity by Contract Indemnity by Employer Independent Inspection Injury to Persons — Damage to Property Injury to Workmen Inspection and Testing Inspection and Testing, Dates for Inspection of Foundations, etc.
Inspection of Operations Inspection of Site by Contractor Instructions for Variations Instructions in Writing Instructions, Supplementary Insurance, Adequacy of Insurance, Evidence and Terms of Insurance, Minimum Amount of Insurance of Works and Contractor's Equipment
37.2 37.3
197
191
192 196
196
38.1 37.1 11.1
197 197 187
51.2 2.5 7.1 25.2
203
23.2
183 186 192 192 192
21.1
191
25.1
Index Insurance, Remedy on Failure to Insure Insurance, Responsibility for Amounts not Recovered insurance, Scope of Cover Insurance, Third Party Insurance, Workmen Interference with Traffice and Adjoining Properties Interim Determination of Extension Interpretations
Labour, Engagement of Language/s and Law Law to which Contract Subject Legislation, Subsequent Lighting, Fencing, Watching, etc. Liquidated Damages for Delay Liquidated Damages, Reduction of Loss or Damage due to Employer's Risks Loss or Damage — Responsibility to Rectify Lump Sum Items — Breakdown of
Materials and Plant, Transport of Materials — Approval of, etc. not Implied Materials, Improper — Removal of Materials, Quality of Materials, Supply of Measurement by Engineer Measurement, Method of Measurement, Quantities Estimated Only Methods of Construction Minimum Amount of Insurance Monthly Payments
22z
Clause
25.3
21.3 21.2 23.1
24.2 29.1
Page
192 191
191
192 192 193
44.3 1.3
200
34.1 5.1 5.1
195 184 184
70.2
218
19.1 47.1
47.2 20.3 20.2 57.2 30.3 54.8 39.1 36.1 8.1 56.1 57.1 55.1
8.2 23.2
60.2
Nominated Subcontractors, Certification of Payments to Nominated Subcontractors, Definition Nominated Subcontractors, Design by Nominated Subcontractors, Objection to Nomination Nominated Subcontractors, Payment to Notice of Claims Notices andFees, Payment of Notices, Consents and Approvals Notice to Contractor Notice to Employer and Engineer
59.5
Objections to Contractor's Employees Omissions, Alterations and Additions Openings, Uncovering and making Operations, Inspection of Order of Work, Contractor to Furnish Programme Other Contractors, Opportunities for
16.2 59. 38.2
Patent Rights Payment if Contract Terminated for Contractor's Default Payment if Contract Terminated for Employer's Default Payment of Claims Payment, Time for Performance Security Performance Security — Claims Under Performance Security — Period of Validity Period of Defects Liability Permanent Works Designed by Contractor
28.1
59.1
59.3 59.2 59.4 53.1 26.1 1.5 68.1
68.2
37.1 14.1 31.1
63.3 69.3 53.5 60.10 10.1
10.3 10.2 49.1
7.2
182
189
200 200 190 190 207 194 206 197 197 186 206 207
206 186 192 211 208 207 208
207 208 207 193 183
216 216 188 207 197 196 188 194 193 212 217 205 211
186 187 187 201 186
Index Physical Obstructions or Conditions — Adverse Physical Obstructions or Conditions — Engineer's Determination
Plant and Materials, Transport of Plant, Conditions of Hire Plant, Customs Clearance Plant, Employer not Liable for damage to Plant, etc. — Exclusive Use for the Works Plant, Quality of Plant, Re-export of Plant, Removal of Policy of Insurance — Compliance with Conditions Possession of Site Possession of Site, Failure to Give Power of Engineer to Fix Rates Priority of Contract Documents Programme to be Submitted Progress— Disruption of Progress — Rate of
Protection of Environment Provision to Indemnify Contractor Provision to Indemnify Employer Provisional Sums, Currencies of Payment Provisional Sums, Definition Provisional Sums, Production of Vouchers Provisional Sums, Use of Quality of Materials and Workmanship Quantities
Rate of Progress Rates of Exchange Rates, Power of Engineer to Fix Rectification of Loss or Damage Reduction of Liquidated Damages Re-export of Plant Regulations, Statutes, etc., Compliance with Rejection Release from Performance Remedies for Default of Contractor Remedying of Defects Remedying of Defects, Cost of Remedy on Contractor's Failure to Insure Removal of Contractor's Employees Removal of Contractor's Equipment Removal of Improper Work, Materials or Plant Removal of Plant, etc. Responsibility to Rectify Loss or Damage Responsibility Unaffected by Approval Restriction on Working Hours Resumption of Work Retention Money, Payment of Returns of Labour and Contractor's Equipment Revised Programme Risks, Employer's Risks, Special Roads, etc., — Damage by Extraordinary Traffic Roads, Interference with Access to Royalties
Clause Page 12.2
187
12.3 30.3 54.5 54.3 54.2
187 194 206 205 205 205
54.1 36.1
195
54.4
205
39.1
197
25.4
197 198 199
42.1
42.2 52.2
203
5.2
185 188 185 200 189 192
14.1
6.3 46.1 19.1
22.3 22.2 72.3
191
58.3 58.2
218 207 207 207
36.1 55.1
206
58.1
46.1 72.1
195
200 218 203 190
52.2 20.2 47.2 54.4 26.1
200 205 193
37.4
196
66.1
215
63.1 49.2 49.3 25.3
211
202 202 192 188
16.2
69.2 39.1 65.7 20.2
217 197
214
7.3
190 186
45.1
200
69.5 60.3 35.1
14.2 20.4 65.
301 29.1
28.2
217
209 195 188 190
213 194 193 193
223
Index
Clause
Page
Safety, Security and Protection of the Environment Samples, Cost of Security, Safety and Protection of the Environment Setting-Out Singular and Plural Site, Clearance on Completion Site Contractor to Keep Clear Site, Inspection of by Contractor Site Operations and Methods of Construction Site, Possession of
19.1
189
36.2
195
19.1 17.1 1.4 33.1 32 1 11.1
189 189 182 195
Special Risks
65.
Staff, Engagement of Statement at Completion Statement, Final Statutes, Regulations, etc. — Compliance with Subcontracting Subcontractors, Nominated Subcontractors, Responsibility of the Contractor for Acts and Default of Subsequent Legislation Substantial Completion of Sections or Parts Sufficiency of Tender Supply of Plant, Materials and Labour Surfaces Requiring Reinstatement Suspension, Engineer's Determination Suspension lasting more than 84 days Suspension of Work
34.1
40.1
198 198 197
Taking-Over Certificate Taking Over of Sections or Parts Tender Documents' Tender, Sufficiency of Termination of Contract by Employer Termination of Contract by Employer, Assignment of Benefit Terms of Insurance Tests, Cost of Tests riot Provided for — Cost of Third Party Insurance Time for Completion Time for Completion, Extension of Time for Payment Traffic, Extraordinary Traffic, Interference with Traffic, Waterborne Transport of Contractor's Equipment and Temporary Works Transport of Materials and Plant
48.1
201
48.2
201
11.1 12.1 63.1
187 187
63.4
212 192 195 196 192 199 199
8.2 42.1
60.5 60.6 26.1 4.1
195 187 186 198 213 195
210 210 193 184
59.
207
4.1 70.2 48.3
218
12.1 8.1
187 186
48.4 40.2 40.3
201
25.1
36.3 36.4 23.1
43.1 44.1
184 201
211
60.10 211
30.2 30.3
194 193 194 194 194
Uncovering Work and Making Openings Unfulfilled Obligations Urgent Remedial Work
38.2 62.2
211
64.1
213
Valuation at Date of Termination by the Employer Variations Variations, Daywork Basis Variations, Exceeding 15 per cent Variations, Instructions for Variations, Power of the Engineer to Fix Rates Variations, Valuation of Vouchers, Production of
63.2
212 202 204 203 203 203
30.1 29.1
30.4
51.1
52.4 52.3 51 .2
52.2 51.3 58.3
197
203 207
Index War, Outbreak of Watching and Lighting, etc. Waterborne Traffic Wayleaves and Facilities Work, Examination of Before Covering Up Work, Improper, Removal of Working Hours, Restriction of Workmanship, Quality of Workmen, Accident or Injury to Works, Care of Works, Completion of (Defects Liability Certificate) Works, Commencement of Works, Insuranceof Works, Remedying of Defects Works, Time for Completion of Works to be Measured Work, Suspension of Work to be in Accordance with the Contract
Clause
20.4 19.1
30.4
42.3 38.1 39.1 45.1 36.1 24.1 20.1 62.1 41.1 21.1
Page
190 189 194 199 197 197
200 195 192 189 211
198 190
49.2
201
43.1 56.1 40.1
206
13.1
199 197 188
Z25
TENDER NAME OF CONTRACT: *
TO: *_____________
Gentlemen,
1. Having examined the Conditions of Contract, Specification, Drawings, and Bill of Quantities and Addenda Nos __________ for the execution of the above-named Works, we the undersigned, offer to execute and complete such Works and remedy any defects therein in conformity with the Conditions of Contract, Specification, Drawings, Bill of Quantities and Addenda for the sum of
or such other sums as may be ascertained in accordance with the said Conditions.
2. We acknowledge that the Appendix forms part of our Tender. 3. We undertake, if our Tender is accepted, to commence the Works as soon as is reasonably possible after the receipt of the Engineer's notice to commence, and to complete the whole of the Works comprised in the Contract within the time stated in the Appendix to Tender.
4. We agree to abide by this Tender for the period of * days from the date fixed for receiving the same and it shall remain binding upon us and may be accepted at any time before the expiration of that period.
5. Unless and until a formal Agreement is prepared and executed this Tender, together with your written acceptance thereof, shall constitute a binding contract between us.
6. We understand that you are not bound to accept the lowest or any tender you may receive. 19 _____
Datedthis
dayof _______________________
Signature
in the capacity of ___________________
duly authorised to sign tenders for and on behalf of ________________________
(IN BLOCK CAPITALS) Address
Witness
Address
Occupation (Note: All details marked * shall be inserted before issue of Tender documents.)
Appendix Sub-Clause
Amount of security (if any)
10.1
_________________ per cent
of the Contract Price Minimum amount of third party insurance
23.2
_____________________ per
occurrence, with the number of occurrences unlimited
Time for issue of notice to commence
41.1
____________________ days
Time for Completion _________________ 43.1
_________________ days
Amount of liquidated damages ___________ 47.1
_________________ per day
Limit of liquidated damages _____________ 47.1
_______________________
DefectsLiabilityPeriod _________________ 49.1
___________________ days
Percentage for adjustment of Provisional Sums
59.4(c)
percent
Percentage of invoice value of listed materials 60.1(c)
per cent
Percentage of Retention __________________ 60.2
per cent
Limit of Retention Money
60.2
_____________________
Minimum Amount of Interim Certificates — 60.2
—____________________
Rateofinterest upon unpaidsums
60.10
_______________ percent
Initials of Signatory of Tender __________________________________________________
(Notes: All details in the list above, other than percentage figure against Sub-Clause 59.4, shall be inserted before issue of Tender documents. Where a number of days is to be
inserted, it is desirable, for consistency with the Conditions, that the number should be a multiple of seven.
Additional entries are necessary where provision is included in the Contract for: (a) completion of Sections (Sub-Clauses 43.1 and 48.2(a)) (b) liquidated damages for Sections (Sub-Clause 47.1) (c) a bonus (Sub-Clause 47.3 — Part II) (d) payment for materials on Site (Sub-Clause 60.1(c)) (e) payment in foreign currencies (Clause 60 — Part II) (f) an advance payment (Clause 60 — Part II) (g) adjustments to the Contract Price on account of Specified Materials (Sub-Clause 70.1 — Part 11) (h) rates of exchange (Sub-Clause 72.2 — Part II))
22
Agreement This Agreement made the __________________ day of __________________ 19 _____ Between
of (hereinafter called "the Employer") of the one part and ___________________________________
of ___________________________________
(hereinafter called "the Contractor") of the other part
Whereas the Employer is desirous that certain Works should be executed by the Contractor, viz and has accepted a Tender by the Contractor for the execution and completion of such Works and the remedying of any defects therein Now this Agreement witnesseth as follows: 1. In this Agreement words and expressions shall have the same meanings as are respectively assigned to them in the Conditions of Contract hereinafter referred to.
2. The following documents shall be deemed to form and be read and construed as part of this Agreement, viz:(a) The Letter of Acceptance; (b) The said Tender; (c) The Conditions of Contract (Parts I and II); (d) The Specification; (e) The Drawings; and (f) The Bill of Quantities.
3. In consideration of the payments to be made by the Employer to the Contractor as hereinafter mentioned the Contractor hereby covenants with the Employer to execute and complete the Works and remedy any defects therein in conformity in all respects with the provisions of the Contract.
4. The Employer hereby covenants to pay the Contractor in consideration of the execution and completion of the works and the remedying of defects therein the Contract Price or such other sum as may become payable under the provisions of the Contract at the times and in the manner prescribed by the Contract. In Witness whereof the parties hçreto have caused this Agreement to be executed the day and year first before written in accordance with their respective laws.
The Common Seal of __________________________________________________ was hereunto
affixed in the presence of:-
or Signed Sealed and Delivered by the said
in the presence of:
22
EDITORIAL AMENDMENTS Following publication of the Fourth Edition in 1987 of the Conditions of
Contract for Works of Civil Engineering Construction, a number of editorial amendments were agreed by FIDIC. The amendments have been incorporated
during reprinting and the list below clarifies the differences between this copy and the original document.
Foreword
The last sentence of the first paragraph previously read 'The Conditions are
equally suitable for use on domestic contracts.'
Page 186
Sub-Clause 10.1. A comma has been inserted after the word 'Contract' in the
second line. The third sentence previously read 'Such security shall be in such form as may be agreed between the Employer and the Contractor.'
Page 1 91
Sub-Clause 22.1 (b) was previously one complete paragraph, ie there was no
Page 1 95
Sub-Clause 31.2(c) was previously one complete paragraph, ie there was no space
space between the words ". . . other than the Works)," and the remainder of the Sub-Clause.
between the words ". . . nature for any such," and the remainder of the Sub-Clause.
Page 200
Page.201 Page 209 Page 21 0
Page 21 5 Page 21 8
Sub-Clause 44.3. The penultimate sentence was previously, "In both such cases
the Engineer shall notify the Contractor accordingly, with a copy to the Employer." Sub-Clause 49.1 (a). The word 'substantial' has been deleted. Sub-Clause 60.3 (b) was previously two paragraphs, the second beginning with the words 'Provided also that if at such time. . Sub-Clause 60.5. The word 'The' has been inserted at the beginning of the final paragraph. Sub-Clause 67.1. In the second line of the fourth paragraph, the word 'notice' replaces the word 'notification'. Reference to Part II. In the third line, the words 'and (iv)' have been inserted after
paragraph (a) (i).
Tender Item 3.
The word 'Works' has been capitalised.
Agreement Line 4
Line 6
-
Inverted commas have been inserted following the words 'the Employer.' Inverted commas have been inserted before the word 'the' instead of before the
word 'Contractor.' Line 8 Line 9
Line 11 Last lines
The word Contractor has been capitalised.
The words "Tender by the Contractor" were previously "Tender by Contractor." The word 'Agreement' has been capitalised. The
Agreement previously ended with the words 'Binding Signature of
Employer' and 'Binding Signature of Contractor'.
2(2c:
1.
UDIC
FEDERATION INTERNATIONALE DES INGENIEURS-CONSEILS
GUIDE TO THE USE OF FIDIC CONDITIONS OF CONTRACT FOR WORKS OF CIVIL
ENGINEERING CONSTRUCTION PART II CONDITIONS OF PARTICULAR APPLICATION WITH GUIDELINES FOR PREPARATION OF PART II CLAUSES
FOURTH EDITION 1987 Reprinted 1988 with editorial amendments
CONTENTS
PART II: CONDITIONS OF PARTICULAR APPLICATION Page
Introduction (including special reference to Dredging and Reclamation Work)
1 Definitions 2 Engineer's Duties 5 Language/s and Law and Documents 9 Contract Agreement 10 Performance Security 11 Inspection of Site 12 Adverse Physical Obstructions or Conditions 14 Programme and Cash Flow Estimate 15 Contractor's Superintendence 16 Contractor's Employees 18 Boreholes and Exploratory Excavation 19 Safety, Security and Protection of the Environment 21 Insurance of Works and Contractor's Equipment
21,23 & 25 Insurances Arranged by Employer
28 Royalties 31 Opportunities for Other Contractors
34 Labour 35 Records and Reports 40 Suspension 43 Time for Completion 45 Restriction on Working Hours
47 Bonuses 48 Prevention from Testing 49 Defects Liability 50 Contractor to Search
51 Variations 52 Payment in Foreign Currency 54 Vesting of Contractor's Equipment 60 Certificates and Payments 67 Settlement of Disputes
68 Notices 69 Default of Employer 70 Changes in Cost and Legislation 72 Currency Proportions 73 Additional Clauses
232 235 235 235 240 241
237 237 237 241
241 241 241
242,243
243 243 244 244 245 246 246 246 246 247 247 248 248 248 249 249 251 251 251
252
255 256,257
INTRODUCTION The terms of the Fourth Edition of the Conditions of Contract for Works of Civil
Engineering Construction have been prepared by the Fédération Internationale des Ingénieurs Conseils (FIDIC) and are recommended for general use for the
purpose of construction of such works where tenders are invited on an international basis. The Conditions are equally suitable for use on domestic contracts. The version in English of the Conditions is considered by FIDIC as the official and authentic text for the purpose of translation.
The Clauses of general application have been grouped together in a separately bound document and are referred to as Part I — General Conditions. They have been printed in a form which will facilitate their inclusion, as printed, in the contract documents normally prepared.
In the preparation of the Conditions it was recognised that while there are numerous Clauses which will be generally applicable there are some Clauses which must necessarily vary to take account of the circumstances and locality of the Works. Part I — General Conditions and Part II — Conditions of Particular Application together comprise the Conditions governing the rights and obligations of the
parties.
For this reason a Part II standard form has not been produced. It will be necessary to prepare a Part II document for each individual contract and the Guidelines are intended to aid in this task by giving options for various clauses where appropriate. Part II clauses may arise for one or more reasons, of which the following are examples: (i) Where the wording in Part I specifically requires that further information is
to be included in Part II and the Conditions would not be complete without that information, namely in Sub-Clauses 1.1 paragraphs (a) (i) and (iv), 5.1 (part), 14.1, 14.3, 68.2 and 70.1 (ii) Where the wording in Part I indicates that supplementary information may be included in Part II, but the conditions would still be complete without any such information, namely in Sub-Clauses 2.1 paragraph (b), 5.1 (part), 21.1 paragraph (b) and 72.2. (iii) Where the type, circuristances or locality of the Works necessitates additional Clauses or Sub-Clauses. (iv) Where the law of the country or exceptional circumstances necessitate an alteration in Part I. Such alterations should be effected by stating in Part II that a particular Clause, or part of a Clause, in Part I is deleted and giving the substitute Clause, or part, as applicable. As far as possible, in the Clauses that are mentioned hereunder, example wording is provided. In the case of some Clauses, however, only an aide-memoire for the
preparation is given. Before incorporating any example wording it must be checked to ensure that it is wholly suitable for the particular circumstances and, if not, it must be varied. Where example wording is varied and in all cases where additional material is included in Part II, care must be taken that no ambiguity is created with Part I or between the Clauses in Part II.
's FIDIC 1987
Dredging and Reclamation Work Special consideration must be given to Part H where dredging and certain types of reclamation work are involved. Dredgers are considerably more expensive than most items of Contractor's Equipment and the capital value of a dredger can often exceed the value of the Contract on which it is used. For this reason, it is in the interests of both the Employer and the Contractor that
a dredger is operated intensively in the most economic fashion, subject to the quality of work and any other over-riding factors. With this end in view, it is customary to allow the Contractor to execute dredging work continuously by day and by night seven days a week. Another difference from most civil engineering is
that on dredging work the Contractor is not normally held responsible for the remedying of defects after the date of completion as certified under Clause 48. Part II contains explanations and example wording to cover the above points and others relating to dredging. Clauses 11, 12, 18, 19, 28, 40, 45, 49, 50 and 51 are those which most often require attention in Part II when dredging work is involved and reference is included under each of these Clauses. Other Clauses may also need additions in Part II in certain circumstances. Reclamation work varies greatly in character and each instance must be considered before deciding whether it is appropriate to introduce in Part II changes similar to those adopted for dredging, or to use the standard civil engineering form unaltered.
© FIDIC 1987
Page blank in original
PART II CONDITIONS OF PARTICULAR APPLICATION Clause 1 Sub-Clause 1.1 — Definitions
(a) (i) The E,nployer is (insert name) (a) (iv) The Engineer is (insert name) If further definitions are essential, for example the name of an International Financing Institution (IFI), additions should be made to the list.
Clause 2 Sub-Clause 2.1 — Engineer's Duties
EXAMPLE The Engineer shall obtain the specific approval of the Employer before carrying out his duties in accordance with the following Clauses of Part 1: (a) Clause (insert applicable number) (b) Clause (insert applicable number) (c) Clause (insert applicable number) This list should be extended or reduced as necessary.
In some cases the obligation to obtain the approval of the Employer may apply to only one Sub-Clause out of several in a Clause or approval may only be necessary beyond certain limits, monetary or otherwise. Where this is so, the example wording must be varied. If the obligation to obtain the approval of the Employer could lead to the Engineer being unable to take aëtion in an emergency, where matters of safety are involved, an additional paragraph may be necessary.
EXAMPLE Notwithstanding the obligation, as set out above, to obtain approval, if, in the opinion of the Engineer, an emergency occurs affecting the safety of life or of the Works or of adjoining property, he may, without relieving the Contractor of any of his duties and responsibilities under the Contract, instruct the Contractor to execute all such work or to do all such things as may, in the opinion of the Engineer, be necessary to abate or reduce the risk. The Contractor shallforth with
comply, despite the absence of approval of the Employer, with any such instruction of the Engineer. The Engineer shall determine an addition to the Contract Price, in respect of such instruction, in accordance with Clause 52 and shall notify the Contractor accordingly, with a copy to the Employer.
Clause 5 Sub-Clause 5.1 — Language/s and Law
(a) The language is (insert as applicable) (b) The law is that in force in (insert name of country)
If necessary (a) above should be varied to read: The languages are (insert as applicable) and there should be added The Ruling Language is (insert as applicable)
© FIDIC 1987
Sub-Clause 5.2 — Priority of Contract Documents Where it is decided that an order of precedence of all documents should be included, this Sub-Clause may be varied as follows:
EXAMPLE Delete the documents listed 1—6 and substitute: (1) the Contract Agreement (if completed); (2) the Letter of Acceptance; (3) the Tender;
(4) the Conditions of Contract Part II; (5) the Conditions of Contract Part I; (6) the Specification; (7) the Drawings; and (8) the priced Bill of Quantities
or Where it is decided that no order of precedence of documents should be included, this Sub-Clause may be varied as follows:
EXAMPLE Delete the text of the Sub-Clause and substitute: The several documents forming the Contract are to be taken as mutually explanatory of one another, but in the case of ambiguities or discrepancies the
priority shall be that accorded by law. If, in the opinion of the Engineer, such ambiguities or discrepancies make it necessary to issue any instruction to the Contractor in explanation or adjustment, the Engineer shall have authority to issue such instruction.
Clause 9 Where it is decided that a Contract Agreement should be entered into and executed the
form must be annexed to these Conditions as stated in Sub-Clause 9.1 of these Conditions. A suitable form is annexed to Part 1 — General Conditions.
Clause 10 Sub-Clause 10.1 — Performance Security
Where it is decided that a performance security should be obtained by the Contractor, the form must be annexed to these ConditiQns as stated in Sub-Clause 10.1 of Part I of these
Conditions. Two example forms of performance security are given on pages 7, 8 and 9. The Clause and wording of the example forms may have to be varied to comply with the law of the Contract which may require the forms to be executed under seal. Where there is provision in the Contract for payments to the Contractor to be made in foreign currency, Sub-Clause 10.1 of Part I of these Conditions may be varied. EXAMPLE
After the first sentence, insert the following sentence: The security shall be denominated in the types and proportions of currencies stated in the Appendix to Tender. Where the source of the performance security is to be restricted, an additional Sub-Clause
may be added.
© FIDIC 1987
EXAMPLE SUB-CLAUSES
Source of 10.4 The performance security, submitted by the Contractor in accordance with Performance Sub-Clause 10.1, shall be furnished by an institution registered in (insert the country where the Works are to be executed) or licensed to do business in such Security country.
or
Source of 10.4 Wherethe performance security is in the form of a bank guarantee, it shall be Performance issued by: Security
(a) a bank located in the country of the Employer, or
(b) a foreign bank through a correspondent bank located in the country of the Employer.
Clause
11
Where the bulk or complexity of the data, or reasons of security enforced by the country where the Works are to be executed, makes it impracticable for the Employer to make all data available with the Tender Documents and inspection of some data by the Contractor at an office is therefore expected, it would be advisable to make the circumstances clear.
EXAMPLE SUB-CLAUSE
Access 11.2 Data made available by the Employer in accordance with Sub-Clause 11.1 shall
to Data
be deemed to include data listed elsewhere in the Contract as open for inspection at (insert particulars of the office or offices where such data is stored)
Sub-Clause 11.1 — Inspection of Site
For a Contract comprising dredgIng and reclamation work the Clause may be varied as follows:
EXAMPLE
In the first paragraph, delete the words 'hydrological and sub-surface' and substitute 'hydrographic and sub-seabed'. In the second paragraph, under (a) delete the word 'sub-surface' and substitute
'sub-seabed' and under (b) delete the word 'hydrological' and substitute 'hydrographic'.
Clause 12 Sub-Clause 12.2 — Adverse Physical Obstructions or Conditions
For a Contract comprising dredging and some types of reclamation work the Sub-Clause may require to be varied.
EXAMPLE Delete the words ',other than climatic conditions on the Site,'.
Clause 14 Sub-Clause 14.1 — Programme to be Submitted
The time within which the programme shall be subm itted shall be (insert number) days.
Sub-Clause 14.3 — Cash Flow Estimate to be Submitted The time within which the detailed cash flow estimate shall be submitted shall be (insert number) days. In both examples given above it is desirable for consistency with the rest of the Conditions that the number of days inserted should be a multiple of seven.
© FIDIC 1987
EXAMPLE PERFORMANCE GUARANTEE By this guarantee We, whose registered office isat ____________________________________________
(hereinafter called "the Contractor") and _______________________________ whose registered office is at ______________________________________________
(hereinafter called "the Guarantor") are held and firmly bound unto (hereinafter called "the Employer") in the sum of
for the payment of which sum
the Contractor and the Guarantor bind themselves, their successors and assigns jointly and severally by these presents. Whereas the Contractor by an Agreement made between the Employer of the one part and the Contractor of the other part has entered into a Contract (hereinafter called "the said Contract") to execute and complete certain Works and remedy any defects therein as therein mentioned in conformity with the provisions of the said Contract.
Now the Condition of the above-written Guarantee is such that if the Contractor
shall duly perform and observe all the terms provisions conditions and stipulations of the said Contract on the Contractor's part to be performed and observed according to the true purport intent and meaning thereof or if on default by the Contractor the Guarantor shall satisfy and discharge the damages sustained by the Employer thereby up to the amount of the above-written Guarantee then this obligation shall be null and void but otherwise shall be and remain infuilforce and effect but no alteration in terms of the said Contract or in the extent or nature of the Works to be executed, completed and defects therein remedied thereunder and no allowance of time by the Employer or the Engineer under the said Contract nor any forbearance or forgiveness in or in respect of any matter or thing concerning the said Contract on the part of the Employer or the said Engineer shall in any way release the Guarantor from any liability under the
above-written Guarantee. Provided always that the above obligation of Guarantor to satisfy and discharge the damages sustained by the Employer shall arise only
(a) on written notice from both the Employer and the Contractor that the Employer and the Contractor have mutually agreed that the amount of damages concerned is payable to the Employer or (b) on receipt by the Guarantor of a legally certified copy of an award issued in
arbitration proceeding carried out in conformity with the terms of the said Contract that the amount of the damages is payable to the Employer.
Signed on _____________________ Signed on _____ on behalf of ____________________ on behalf of by by in the capacity of_________________ in the capacity of. in the presence of ___________________ in the presence of
© FIDIC 1987
EXAMPLE SURETY BOND FOR PERFORMANCE Know all Men by these Presents that (name and address of Contractor)
as Principal (hereinafter called "the Contractor") and (name, legal title and address of Surety)
as Surety (herein after called "the Surety"), are held and firmly bound unto (name and address of Employer)
—________________
__________________________________________ as Obligee (hereinafter called
"the Employer") in the amount of
for the payment of which sum, well
and truly to be made, the Contractor and the Surety bind themselves, their successors and assigns, jointly and severally, firmly by these presents.
Whereas the Contractor has entered into a written contract agreement with the
Employerdated the _______________ day of_______________ 19 for (name of Works) in accordance with the plans and specifications and amendments thereto, to the extent herein provided for, are by reference made part hereof and are hereinafter referred to as the Contract.
Now, therefore, the Condition of this Obligation is such that, if the Contractor
shall promptly and faithfully perform the said Contract (including any amendments thereto) then this obligation shall be null and void; otherwise it shall remain in fullforce and effect.
Whenever Contractor shall be, and declared by Employer to be, in default under
the Contract, the Employer having performed the Employer's obligations thereunder, the Surety may promptly remedy the default, or shall promptly:(1) Complete the Contract in accordance with its terms and conditions; or
(2) Obtain a bid or bids for submission to the Employer for completing the Contract in accordance with its terms and conditions, and upon determination by
Employer and Surety of the lowest responsible bidder, arrange for a contract between such bidder and Employer and make available as work progresses (even though there should be a default or a succession of defaults under the contract or contracts of completion arranged under this paragraph) sufficient funds to pay the cost of completion less the balance of the Contract Value; but not exceeding, including other costs and damages for which the Surety may be liable hereunder,
the amount set forth in the first paragraph hereof The term "balance of the Contract Value", as used in this paragraph, shall mean the total amount payable by Employer to Contractor under the Contract, less the amount properly paid by Employer to Contractor; or (3) Pay the Employer the amount required by Employer to complete the Contract
in accordance with its terms and conditions any amount up to a total not exceeding the amount of this Bond.
FIDIC 1987
The Surety shall not be liable for a greater sum than the specified penalty of this Bond.
Any suit under this Bond must be instituted before the issue of the Defects Liability Certificate.
No right of action shall accrue on this Bond to or for the use of any person or corporation other than the Employer named herein or the heirs, executors, administrators or successors of the Employer. Signed on ______________________ Signed on ______________________ on behalf of____________________ on be ha If of
by in the capacity of
by in the capacity of
in the presence of ___________________
in the presence of
(C)
FIDIC 1987
Clause 15 Where the language in which the Contract documents have been drawn up is not the
language of the country in which the Works are to be executed, or where for any other reason it is necessary to stipulate that the Contractor's authorised representative shall be fluent in a particular language, an additional Sub-Clause may be added. EXAMPLE SUB-CLAUSES
Language Ability 15.2 The Contractor's authorised representative shall be fluent in (insert name of
of Contractor's Representative
language).
or
Interpreter to be 15.2 If the Contractor's authorised representative is not, in the opinion of the Made Available
Engineer, fluent in (insert name of language), the Contractor shall have available
on Site at all times a competent interpreter to ensure the proper transmission of instructions and information.
Clause 16 Where the language in which the Contract documents have been drawn up is not the
language of the country in which the Works are to be executed, or where for any other reason it is necessary to stipulate that members of the Contractor's superintending staff shall be fluent in a particular language, an additional Sub-Clause may be added. EXAMPLE SUB-CLAUSE
Language Ability 16.3 A reasonable proportion of the Contractor's superintending staff shall have a of Superintending working knowledge of (insert name of language) or the Contractor shall have Staff available on Site at all times a sufficient number of competent interpreters to ensure the proper transmission of instructions and information. Where there is a desire, but not a legal requirement, that the Contractor makes reasonable
use of materials from or persons resident in the country in which the Works are to be executed, an additional Sub-Clause may be added. EXAMPLE SUB-CLAUSE
Employment of 16.4 The Contractor is encouraged, to the extent practicable and reasonable, to Local Personnel employ staff and labour from sources within (insert name of country).
Clause 18 Sub-Clause 18.1 — Boreholes and Exploratory Excavation
For a Contract comprising dredging and reclamation work the Sub-Clause may require to be varied.
EXAMPLE Add second sentence as follows: Such exploratory excavation shall be deemed to include dredging.
Clause 19 Sub-Clause 19.1 — Safety, Security and Protection of the Environment
Where a Contract includes dredging the possibilityof pollution should be given particular
attention and additional wording may be required. For example, where fishing and recreation areas might be influenced, the Contractor should be required to plan and execute the dredging so that the effect is kept to a minimum. Where there is a risk of chemical pollution from soluble sediments in the dredging area, for instance in a harbour,
it is important that sufficient information is provided with the Tender documents. Responsibilities should be clearly defined.
IIDIC 1987
2_4_I
Clause 21 Sub-Clause 21.1 — Insurance of Works and Contractor's Equipment
Where there is provision in the Contract for payments to the Contractor to be made in foreign currency, this Sub-Clause may be varied. EXAMPLE Add final sentence as follows:
The insurance in paragraphs (a) and (b) shall provide for compensation to be payable in the types and proportions of currencies required to rectify the loss or damage incurred.
Where it is decided to state the deductible limits for the Employer's Risks, this Sub-Clause may be varied.
EXAMPLE Add to paragraph (a) as follows:
and with deductible limits for the Employer's Risks not exceeding (insert amounts)
Clause 21, 23 and 25. Insurances Arranged by Employer In certain circumstances, such as where a number of separate contractors are employed on a single project, or phased take-over is involved, it may be preferable for the Employer
to arrange insurance of the Works, and Third Party insurance. In such case, it must be clear in the Contract that the Contractor is not precluded from taking out any additional insurance, should he desire to do so, over and above that to be arranged by the Employer.
Tenderers must be provided at the Tender stage with details of the insurance to be arranged by the Employer, in order to assess what provision to make in their rates and prices for any additional insurance, and for the amount of policy deductibles which they
will be required to bear. Such details shall form part of the Contract between the Employer and the Contractor. Example wording to allow for the arrangement of insurance by the Employer is as follows:
EXAMPLE
Clause 21 Delete
the text of the Clause and substitute the following re-numbered
Sub-Clauses:
Insurance 21.1 Without limiting his or the Contractor's obligations and responsibilities under of Works Clause 20, the Employer will insure: (a) the Works, together with materials and Plant for incorporation therein, to the full replacement cost
(b) an additional sum to cover any additional costs of and incidental to the rectification of loss or damage including professional fees and the cost of demolishing and removing any part of the Works and of removing debris of whatsoever nature.
Insurance of 21.2 The Contractor shall, without limiting his obligations and responsibilities under Contractor's Clause 20, insure the Contractor's Equipment and other things brought onto the site by the Contractor, for a sum sufficient to provide for their replacement at the Equipment Site.
Scope of Cover 21 3
The insurance in Sub Clause 21 1 shall be in the joint names of the Contractor and the Employer and shall cover:
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(a) the Employer and the Contractor against loss or damage as provided in the details of insurance annexed to these Conditions, from the start of work at the Site until the date of issue of the relevant Taking-Over Certificate in respect of the Works or any Section or part thereof as the case may be, and
Responsibility for 21.4 Amounts not Recovered
(b) the Contractor for his liability: (i) during the Defects Liability Period for loss or damage arising from a cause occurring prior to the commencement of the Defects Liability Period, or (ii) occasioned by the Contractor in the course of any operations carried out by him for the purpose of complying with his obligations under Clauses 49 and 50. Any amounts not insured or not recoveredfrom the insurers shall be borne by the Employer or the Contractor in accordance with their responsibilities under Clause 20.
Clause 23 Delete the text of the Clause and substitute:
Third Party 23.1 Without limiting his or the Contractor's obligations and responsibilities under
Insurance
(Including Employer's Property)
Clause 22, the Employer will insure in the joint names of the Contractor and the Employer, against liabilities for death of or injury to any person (other than as
provided in Clause 24) or loss of or damage to any property (other than the Works) arising out of the performance of the Contract, as provided in the details of insurance referred to in Sub-Clause 21.3.
Clause 25 Delete the text of the Clause and substitute: Evidence 25.1 The insurance policies to be arranged by the Employer pursuant to Clauses 21 and 23 shall be consistent with the general terms described in the Tender and copies of and Terms of such policies shall when required be supplied by the Employer to the Contractor. Insurances
Adequacy of 25.2 The Employer shall notify the insurers of changes in the nature, extent or Insurances programme for execution of the Works and ensure the adequacy of the insurances at all times in accordance with the terms of the Contract and shall, when required, produce to the Contractor the insurance policies in force and the
receipts for payment of the premiums. No variations shall be made to the insurances by the Employer without the prior approval of the Contractor.
Remedy on
Employer's
Failure to Insure
25.3 If andso far as the Employerfails to effect and keep in force any of the insurances referred to in Sub-Clause 25.1, then the Contractor may effect and keep in force any such insurance and pay any premium as may be necessary for that purpose
and add the amount so paid to any monies due or to become due to the Contractor, or recover the same as a debt due from the Employer.
Compliance with 25.4 In the event that the Contractor or the Employer fails to comply with conditions imposed by the insurance policies effected pursuant to the Contract, each shall Policy Conditions indemnify the other against all losses and claims arising from such failure.
Clause 28 Sub-Clause 28.2 — Royalties
For a Contract comprising dredging and reclamation work and for any other Contract involving the dumping of materials the Sub-Clause may require to be varied. EXAMPLE Add second sentence as follows:
The Contractor shall also be liable for all payments or compensation, if any, levied in relation to the dumping of part or all of any such materials.
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412
It is sometimes the case on dredging contracts for the Employer to bear the costs of
tonnage and other royalties, rent and other payments or compensation. If such conditions are to apply, Sub-Clause 28.2 should be varied either by adding wording or by deleting the existing wording and substituting new wording.
Clause 31 Where the particular requirements of other contractors are known within reasonable
limits at the time of preparation of the Contract documents, details must be stated. The Specification is usually the appropriate place to do so but, exceptionally, some reference may be desirable in the Conditions. In that case, an additional Sub-Clause or Sub-Clauses could be added to this Clause.
Clause 34 It will generally be necessary to add a number of Sub-Clauses, to take account of the circumstances and locality of the Works, covering such matters as: permits and
registration of expatriate employees; repatriation to place of recruitment; provision of temporary housing for employees; requirements in respect of accommodation for staff of Employer and Engineer; standards of accommodation to be provided; provision of access roads, hospital, school, power, water, drainage, fire services, refuse collection, communal buildings, shops, telephones; hours and conditions of working; rates of pay; compliance with labour legislation; maintenance of records of safety and health.
Rates of Wages 34.
and Conditions of Labour
EXAMPLE SUB-CLAUSES (to be numbered, as appropriate) The Contractor shall pay rates of wages and observe conditions of labour not less favourable than those established for the trade or industry where the work is carried out. In the absence of any rates of wages or conditions of labour so established, the Contractor shall pay rates of wages and observe conditions of
labour which are not less favourable than the general level of wages and conditions observed by other employers whose general circumstances in the trade or industry in which the Contractor is engaged are similar.
Employment of
Persons in the
34.
Service of Others Repatriation of 34. Labour
Housing for Labour 34.
Accident Prevention 34. Officer; Accidents
The Contractor shall not recruit or attempt to recruit his staff and labour from amongst persons in the service of the Employer or the Engineer.
The Contractor shall be responsible for the return to the place where they were recruited or to their domicile of all such persons as he recruited and employed for
the purposes of or in connection with the Contract and shall maintain such persons as are to be so returned in a suitable manner until they shall have left the Site or, in the case of persons who are not nationals of and have been recruited outside (insert name of country), shall have left (insert name of country). Save insofar as the Contract otherwise provides, the Contractorshall provide and maintain such accommodation and amenities as he may consider necessary for all
his staff and labour, employed for the purposes of or in connection with the Contract, including all fencing, water supply (both for drinking and other purposes), electricity supply, sanitation, cookhouses, fire prevention and fire-fighting equipment, air conditioning, cookers, refrigerators, furniture and other requirements in connection with such accommodation or amenities. On completion of the Contract, unless otherwise agreed with the Employer, the temporary camps/housing provided by the Contractor shall be removed and the site reinstated to its original condition, all to the approval of the Engineer. The Contractor shall have on his staff at the Site an officer dealing only with questions regarding the safety and protection against accidents of all staff and labour. This officer shall be qualifiedfor this work and shall have the authority to issue instructions and shall take protective measures to prevent accidents.
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Health and Safety 34.
Due precautions shall be taken by the Contractor, and at his own cost, to ensure
the safety of his staff and labour and, in collaboration with and to the
Measures against 34. Insect and Pest Nuisance
requirements of the local health authorities, to ensure that medica/staff, first aid equipment and stores, sick bay and suitable ambulance service are available at the camps, housing and on the Site at al/times throughout the period of the Contract and that suitable arrangements are made for the prevention of epidemics and for all necessary welfare and hygiene requirements. The Contractorshallat all times take the necessary precautions to protect al/staff and labour employed on the site from insect nuisance, rats and other pests and reduce the dangers to health and the general nuisance occasioned by the same. The Contractor shall provide his staff and labour with suitable prophylactics for the prevention of malaria and take steps to prevent the formation of stagnant
pools of water. He shall comply with all the regulations of the local health
authorities in these respects and shall in particular arrange to spray thoroughly with approved insecticide all buildings erected on the Site. Such treatment shall be carried out at least once a year or as instructed by the Engineer. The Contractor shall warn his staff and labour of the dangers of bilharzia and wild animals.
Epidemics 34.
Burial of the Dead 34.
In the event of any outbreak of illness of an epidemic nature, the Contractor shall comply with and carry out such regulations, orders and requirements as may be
made by the Government, or the local medical or sanitary authorities, for the purpose of dealing with and overcoming the same. The Contractor shall make all necessary arrangements for the transport, to any place as required for burial, of any of his expatriate employees or members of their families who may die in (insert name of country). The Contractor shall also be responsible, to the extent required by the local regulations, for making any arrangements with regard to burial of any of his local employees who may die while engaged upon the Works.
Supply of 34. Foodstuffs
The Contractor shall arrange for the provision of a sufficient supply of suitable food at reasonable prices for all his staff and labour, or his Subcontractors, for the purposes of or in connection with the Contract.
Supply of Water 34. Alcoholic Liquor 34. or Drugs
The Contractor shall, so far as is reasonably practicable, having regard to local conditions, provide on the Site an adequate supply of drinking and other water for the use of his staff and labour.
The Contractor shall not, otherwise than in accordance with the Statutes, Ordinances and Government Regulations or Orders for the time being in force,
import, sell, give, barter or otherwise dispose of any alcoholic liquor or drugs, or
permit or suffer any such importation, sale, gift, barter or disposal by his
Arms and 34. Ammunition
Festivals and 34. Religious Customs Disorderly Conduct 34.
Subcontractors, agents, staff or labour. The Contractor shall not give, barter or otherwise dispose of to any person or persons, any arms or ammunition of any kind or permit or suffer the same as aforesaid. The Contractor shall in all dealings with his staff and labour have due regard to all recognised festivals, days of rest and religious or other customs. The Contractor shall at all times take all reasonable precautions to prevent any unlawful, riotous or disorderly conduct by or amongst his staff and labour and for the preservation of peace and protection of persons and property in the neighbourhood of the Works against the same.
Clause 35 Additional Sub-Clauses may be desirable to cover circumstances which require the maintenance of particular records or the provision of certain specific reports.
EXAMPLE SUB-CLAUSES (to be numbered, as appropriate)
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Records of Safety 35. and Health
Reporting of 35. Accidents
The Contractor shall maintain such records and make such reports concerning safety, health and welfare of persons and damage to property as the Engineer may from time to time prescribe.
The Contractor shall report to the Engineer details of any accident as soon as possible after its occurrence. In the case of any fatality or serious accident, the Contractor shall, in addition, notify the Engineer immediately by the quickest available means.
Clause 40 For a Contract comprising dredging and some types of reclamation work the Clause be varied. Sub-Clause 40.1 — Suspension of Work
EXAMPLE Delete paragraph (c) and renumber paragraph (d) as (c). Sub-Clause 40.3 — Suspension Lasting more than 84 Days
EXAMPLE In the first sentence delete the words ', (c) or (d)' and substitute 'or (c)'.
Clause 43 Sub-Clause 43.1 — Time for Completion
Where completion is stated to be by a date and not within a period of time, the Sub-Clause will require to be varied.
EXAMPLE Delete the words, 'within the time.. .such extended time' and substitute 'by the date or dates stated in the Appendix to Tender for the whole of the Works or the Section (as the case may be) or such later date or dates'.
Clause 45 For a Contract located in an isolated area, where environmental restrictions do not apply, or where a Contract comprises work, such as dredging and reclamation, that may require continuous working, the Clause may be varied.
EXAMPLE Delete Sub-Clause 45.1 and substitute:
Working Hours 45. 1 Subject to any provision to the contrary contained in the Contract, the Contractor shall have the option to work continuously by day and by night and on locally recognised days of rest. The Contractor's option may be further extended by substituting, in place of the last
three words: holidays or days of rest.
Clause 47 Where it is desired to make provision for the payment of a bonus or bonuses for early
completion, an additional Sub-Clause may be added. In the case where a bonus is provided for early completion of the whole of the Works:
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EXAMPLE SUB-CLAUSE
Bonus for 47.3 If the Contractor achieves completion of the Works prior to the time prescribed by Clause 43, the Employer shall pay to the Contractor a sum of(insertfigure)for Completion every day which shall elapse between the date stated in the Taking-Over Certificate in respect of the Works issued in accordance with Clause 48 and the time prescribed in Clause 43.
or In the case where bonuses are provided for early completion of Sections of the Works and details, other than the dates, are given in the Specification:
EXAMPLE SUB-CLAUSE
Bonus for 47.3 Sections are required to be completed by the dates given in the Appendix to Tender in order that such Sections may be occupied and used by the Employer in Completion advance of the completion of the whole of the Works.
Details of the work required to be executed to entitle the Contractor to bonus payments and the amount of the bonuses are stated in the Specification. For the purposes of calculating bonus payments, the dates given in the Appendix to Tender for completion of Sections are fixed and, unless otherwise agreed, no adjustments of the dates by reason of granting an extension of time pursuant to Clause 44 or any other Clause of these Conditions will be allowed.
Issue of certificates by the Engineer that the Sections were satisfactory and complete by the dates given on the certificates shall, subject to Clause 60, entitle
the Contractor to the bonus payments calculated in accordance with the
Specification.
Clause 48 Where it can be foreseen that, when the whole of the Works have been substantially
completed, the Contractor may be prevented by reasons beyond his control from carrying out the Tests on Completion, an additional Sub-Clause may be added.
EXAMPLE SUB-CLAUSE
Prevention 48.5 If the Contractor is prevented from carrying out the Tests on Completion by a from Testing causefor which the Employer or the Engineer or other contractors employed by
the Employer are responsible, the Employer shall be deemed to have taken over the Works on the date when the Tests on Completion would have been completed
but for such prevention. The Engineer shall issue a Taking-Over Certificate accordingly. Provided always that the Works shall not be deemed to have been taken over if they are not substantially in accordance with the Contract.
if the Works are taken over under this Sub-Clause the Contractor shall nevertheless carry out the Tests on Completion during the Defects Liability Period. The Engineer shall require the Tests to be carried out by giving 14 days notice. Any additional costs to which the Contractor may be put, in making the Tests on Completion during the Defects Liability Period, shall be added to the Contract
Price.
Clause 49 For a Contract which includes a high proportion of Plant, an additional Sub-Clause may be necessary.
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EXAMPLE SUB-CLAUSE
Extension of 49.5 The provisions of this Clause shall apply to all replacements or renewals of Plant Defects Liability
carried out by the Contractor to remedy defects and damage as if the replacements and renewals had been taken over on the date they were completed. The Defects Liability Period for the Works shall be extended by a period equal to
the period during which the Works cannot be used by reason of a defect or damage. If only part of the Works is affected the Defects Liability Period shall be
extended only for that part. In neither case shall the Defects Liability Period extend beyond 2 years from the date of taking over.
When progress in respect of Plant has been suspended under Clause 40, the
Contractor's obligations under this Clause shall not apply to any defects occurring more than 3 years after the Time for Completion established on the date of the Letter of Acceptance. For a Contract comprising dredging work an additional Sub-Clause may be added.
EXAMPLE SUB-CLAUSE
No Remedying 49.5 Notwithstanding Sub-Clause 49.2, the Contractor shall have no responsibility for of Defects in the remedying of defects, shrinkages or other faults in respect of dredging work after the date stated in the Taking-Over Certificate. Dredging Work after Completion
Clause 50
For a Contract comprising dredging work and where the second Example Sub-Clause 49.5 has been adopted, an additional Sub-Clause should be added.
EXAMPLE SUB-CLAUSE No Responsibility for 50.2 Notwithstanding Sub-Clause 50.1, the Contractor shall have no responsibility to Cost of Searching of bear the cost of searching for any defect, shrinkage or other fault in respect of dredging work after the date stated in the Taking-Over Certificate. Dredging Work
Clause 51 Sub-Clause 51.1 — Variations
For a Contract comprising dredging and some types of reclamation work the Sub-Clause may require to be varied.
EXAMPLE
Addfinal sentence as follows: Provided also that the Contractor shall be under no obligation to execute any variation which cannot be executed by the Contractor's Equipment being used or to be used on the Works.
Clause 52 Where provision is made in the Contract for payment in foreign currency, this Clause
may be varied. Sub-Clause 52.1 — Valuation of Variations
EXAMPLE
Addfinal sentence as follows: The agreement, fixing or determination of any rates or prices as aforesaid shall include any foreign currency and the proportion thereof.
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Sub-Clause 52.2 — Power of Engineer to Fix Rates
Add to first paragraph final sentence as follows: The agreement or fixing of any rates or prices as aforesaid shall include any foreign currency and the proportion thereof. Sub-Clause 52.3 — Variations Exceeding 15 per cent
Add final sentence as follows:
The adjustment or fixing of any sum as aforesaid shall have due regard to any foreign currency included in the Effective Contract Price and the proportion thereof. Where it is required to place some limitation on the range of items for which the rates and prices may be subject to review, the Clause may be varied.
Sub-Clause 52.2 — Power of Engineer to Fix Rates
EXAMPLE
At the end of the first paragraph add: Provided furt her that no change in the rate orpricefor any item contained in the Contract shall be considered unless such item accounts for an amount more than 2 per cent of the Contract Price, and the actual quantity of work executed under the item exceeds or falls short of the quantity set out in the Bill of Quantities by more than 25 per cent.
Clause 54 Where
vesting of Contractor's Equipment, Temporary Works and materials in the
Employer is required, additional Sub-Clauses may be added.
Vesting
EXAMPLE WORDING AND SUB-CLAUSES Sub-Clauses 54.2 and 54.3 shall be renumbered as 54.3 and 54.4 and Sub-Clauses 54.4 to 54.8 shall be renumbered as 54.6 to 54.10. Add additional Sub-Clauses as follows: 54.2 All Contractor's Equipment, Temporary Works and materials owned by the-
Contractor, or by any company in which the Contractor has a controlling interest, shall, when on the Site, be deemed to be the property of the Employer. Provided always that the vesting of such property in the Employer shall not
prejudice the right of the Contractor to the sole use of the said Contractor's Equipment, Temporary Works and materials for the pwpose of the Works nor shall it affect the Contractor's responsibility to operate and maintain the same under the provisions of the Contract.
Revesting and 54.5 Upon the removal, with the consent of the Engineer under Sub-Clauses 54.1, of Removal any such Contractor's Equipment, Temporary Works or materials as have been deemed to have become the property of the Employer under Sub-Clause 54,2, the
property therein shall be deemed to revest in the Contractor and, upon completion of the Works, the property in the remainder of such Contractor's Equipment, Temporary Works and materials shall, subject to Clause 63, be deemed to revest in the Contractor.
Clause 60 Additional Sub-Clauses may be necessary to cover certain other matters relating to payments. Where payments are to be made in various currencies in predetermined proportions and calculated at fixed rates of exchange the following 3 Sub-Clauses, which should be taken together, may be added:
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EXAMPLE SUB-CLAUSES (to be numbered, as appropriate)
Currency
ofAccount
60.
and Rates of Exchange
The currency of account shall be the (insert name of currency) and for the purposes of the Contract con version between (insert name of currency) and other currencies stated in the Appendix to Tender shall be made in accordance with the Table of Exchange Rates in the Appendix to Tender. Conversion between the
currencies stated in such Table other than the (insert name of currency) shall be made at rates of exchange determined by use of the relative rates of exchange between such currencies and the (insert name of currency) set out therein.
Payments to 60. Contractor
Al/payments to the Contractor by the Employer shall be made (a) in the case of payment (s) under Sub-Clause(s) 70.2 and (insert number of any
other applicable Clause), in (insert name of currency/ies); (b) in the case of payments for certain provisional sum items excluded from the Appendix to Tender, in the currencies and proportions applicable to these items at the time when the Engineer gives instructions for the work covered by these items to be carried out; (c) in any other case, including Increase or Decrease of Costs under Sub-Clause
70.1, in the currencies and proportions stated in the Appendix to Tender as applicable to such payment provided that the proportions of currencies stated in the Appendix to Tender may from time to time upon the application of either party be varied as may be agreed.
Payments to 60. Employer
All payments to the Employer by the Contractor including payments made by way of deduction or set-off shall be made
(a) in the case of credit(s) under Sub-Clause(s) 70.2 and (insert number of any other applicable Clause) in (insert name of currency/ies);
(b) in the case of liquidated damages under Clause 47, in (insert name of currency/ies);
(c) in the case of reimbursement of any sum previously expended by the Employer, in the currency in which the sum was expended by the Employer; (d) in any other case, in such currency as may be agreed. If the part payable in a particular currency of any sum payable to the Contractor is wholly qrpartly insufficient to satisfy by way of deduction or set-off a payment due to the Employer in that currency, in accordance with the provisions of this Sub-Clause, then the Employer may if he so desires make such deduction or set-off wholly or partly as the case may be from the balance of such sum payable in other currencies.
Where all payments are to be made in one currency the following Sub-Clause may be added: EXAMPLE SUB-CLAUSE (to be numbered, as appropriate) Currency of 60. The currency of account shall be the (insert name of currency) and all payments made in accordance with the Contract shall be in (insert name of currency). Such Account and Payments (insert name of currency), other than for local costs, shall be fully convertible. The percentage of such payments attributed to local costs shall be as stated in the Appendix to Tender. Where place of payment is to be defined the following Sub-Clause may be added:
Place of Payment 60.
2
EXAMPLE SUB-CLAUSE (to be numbered, as appropriate) Payments to the Contractor by the Employer shall be made into a bank account nominated by the Contractor in the country of the currency of payment. Where payment is to be made in more than one currency separate bank accounts shall be nominated by the Contractor in the country of each currency and payments shall be made by the Employer accordingly.
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Where provision is to be included for an advance payment the following Sub-Clause may be added:
EXAMPLE SUB-CLAUSE (to be numbered, as appropriate)
Advance Payment 60. An advance payment of the amount stated in the Appendix to Tender shall, following the presentation by the Contractor to the Employer of an approved performance security in accordance with Sub-Clause 10.1 and a Guarantee in terms approved by the Employer for the full value of the advance payment, be certified by the Engineer for payment to the Contractor. Such Guarantee shall be progressively reduced by the amount repaid by the Contractor as indicated in interim certificates of the Engineer issued in accordance with this Clause. The advance payment shall not be subject to retention. The advance payment shall be repaid by way of reduction in interim certificates commencing with the next certificate issued after the total certified value of the Permanent Works and any other items in the Bill of Quantities (excluding the deduction of retention) exceeds (insert figure) per cent of the sum stated in the Letter ofAcceptance. The amount
of the reduction in each interim certificate shall be one (insert fraction) of the difference between the total value of the Permanent Works and any other items in the Bill of Quantities (excluding the deduction of retention) due for certification
in such interim certificate and the said value in the last preceding interim certjficate until the advance payment has been repaid in full. Provided that upon the issue of a Taking-Over Certificate for the whole of the Works or upon the happening of any of the events specified in Sub-Clause 63.1 or termination under Clauses 65, 66 or 69, the whole of the balance then outstanding shall immediately become due and payable by the Contractor to the Employer.
Clause 67 Where
it is decided that a settlement of dispute procedure, other than that of the
International Chamber of Commerce (ICC), should be used the Clause may be varied. Sub-Clause 67.3 — Arbitration
EXAMPLE Following paragraph (b), delete the words 'shall be finally settled.. .International
Chamber of Commerce' and substitute 'shall be finally settled under the UNCITRAL Arbitration Rules as administered by (insert name of administering authority)'.
Where alternatives to ICC are considered care should be taken to establish that the favoured alternative is appropriate for the circumstances of the Contract and that the wording of Clause 67 is checked and amended as may be necessary to avoid any ambiguity with the alternative.
Clause 68 Sub-Clause 68.2 — Notice to Employer and Engineer
For the purposes of this Sub-Clause the respective addresses are: (a) The Employer (insert address) (b) The Engineer (insert address) The addresses should be inserted when the documents are being prepared prior to inviting tenders.
Clause 69 Sub-Clause 69.1 — Default of Employer
Where the Employer is a government it may be considered appropriate to vary the Sub-Clause.
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EXAMPLE Delete paragraph (c) and renumber paragraph (d) as (c). Where the terms of the Sub-Clause, when read in conjunction with Sub-Clause 69.3, are in conflict with the law of the country the Sub-Clause may require to be varied.
EXAMPLE Delete 'or' at the end of paragraph (c) and delete paragraph (d).
Clause 70 Three alternative methods of dealing with price adjustment are given below.
The first alternative is suitable where a contract is of short duration and no price adjustment is to be made: Sub-Clause 70.1 — Increase or Decrease in Cost
EXAMPLE Delete the text of the Sub-Clause and substitute
Subject to Sub-Clause 70.2, the Contract Price shall not be subject to any adjustment in respect of rise or fall in the cost of labour, materials or any other matters affecting the cost of execution of the Contract. Sub-Clause 70.2 — Subsequent Legislation EXAMPLE Delete the words ',other than under Sub-Clause 70.1,'. The second alternative is suitable where price adjustment is to be made by establishing the
difference in cost between the basic price and the current price of local labour and specified materials: Sub-Clause 70.1 — Increase or Decrease in Cost
EXAMPLE Delete the text of the Sub-Clause and substitute Adjustments to the Contract Price shall be made in respect of rise or fall in the cost of local labour and specified materials as set oul in this Sub-Clause. (a) Local Workmen (i) For the purpose of this Sub-Clause: "Local Workmen" means skilled, semi-skilled and unskilled workmen of all
trades engaged by the Contractor on the Site for the purpose of or in connection with the Contract or engaged full time by the Contractor off the
Site for the purpose of or in connection with the Contract (by way of illustration but not limitation: workmen engaged full time in any office, store, workshop or quarry). "Basic Rate" means the applicable basic minimum wage rate prevailing on the date 28 days prior to the latest date for submission of tenders by reason of any National or State Statute, Ordinance, Decree or other Law or any regulations
or bye-law of any local or other duly constituted authority, or in order to conform with practice amongst good employers generally in the area where the Works are to be carried out.
"Current Rate" means the applicable basic minimum wage rate for Local Workmen prevailing on any date subsequent to the date 28 days prior to the latest date set for submission of tenders by reason of any National or State Statute, Ordinance, Decree or other Law or any regulation or bye-law of any local or other duly constituted authority, or in order to conform with practice amongst good employers gen erally in the area where the works are to be carried
out.
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(ii) The adjustment to the Contract Price under the terms of this Sub-Clause shall be calculated by multiplying the difference between the Basic and Current
Rates for Local workmen by: (a) the number of all hours actually worked, and also (b) in respect of those hours worked at overtime rates, by the product of the number of said hours and the percentage addition required by the law to be paid by the Contractor for overtime. Such adjustment may be either an addition to or a deduction from the Contract Price. (iii) No other adjustment of the Contract Price on account offluctuation in the remuneration of Local Workmen shall be made. (b) Specified Materials (i) For the purpose of this Sub-Clause:
"Specified Materials" means the materials stated in Appendix (insert reference) to Tender required on the Site for the execution and completion of the Works. "Basic Prices" means the current prices for the specified materials prevailing on the date 28 days prior to the latest date for submission of tenders.
"Current Prices" means the current prices for the specified materials prevailing at any date subsequent to the date 28 days prior to the latest date for submission of tenders. (ii) The adjustment to the Contract Price under the terms of this Sub-Clause shall be calculated by applying the difference between the Basic and Current Prices to the quantity of the appropriate Specified Material which is delivered to the Site during the period for which the particular Current Price is effective. Such adjustment may be either an addition to or a deduction from the Contract Price. (iii) The Con tractor shall use due diligence to ensure that excessive wastage of the Specified Materials shall not occur. A fly Specified Materials removedfrom the Site shall be clearly identified in the records required under paragraph (d) of this Sub-Clause. (iv) The provisions of this Sub-Clause shall apply to fuels used in Contractor's
Equipment engaged on the Site for the purposes of executing the Works1
including vehicles owned by the Contractor (or hired by him under long term arrangements under which the Contractor is obligated to supply fuel) engaged
in transporting any staff, labour, Contractor's Equipment, Temporary
Works, Plant or materials to and from the Site. Such fuels shall be clearly identified in the records required under paragraph (d) of this Sub-Clause. The provisions of this Sub-Clause shall not apply to any fuels sold or supplied to any employee of the Contractor or to any person for use in any motor vehicle not being used for the purposes of the Contract. (v) The Contractor shall at all times have regard to suitable markets and shall, whenever buying materials a variation in the cost of which would give rise to an adjustment of the Contract Price under this Sub-Clause, be diligent to buy or procure the same at the most economical pri ces as are consistent with the due performance by the Contractor of his obligations under the Contract. If at any time there shall have been any lack of diligence, default or negligence on the part of the Contractor, whether in observing the above requirements or
otherwise, then, for the purposes of adjusting the Contract Price pursuant hereto, no account shall be taken of any increase in cost which may be attributable to such lack of diligence, default or negligence and the amount by which any cost would have been decreased but for such lack of diligence, default or negligence shall be deducted from the Contract Price. (vi) No other adjustment to the Contract Price on account offluctuation in the cost of materials shall be made.
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(c) Overheads and Profits Excluded
In determining the amount of any adjustment to the Contract Price pursuant to this Sub-Clause no account shall be taken of any overheads or profits. (d) Notices and Records The Contractor shallforth with, upon the happening of any event which may or may be likely to give rise to adjustment of the Contract Price pursuant to this Sub-Clause, give notice thereof to the Engineer and the Contractor shall keep such books, accounts and other documents and records as are necessary to enable
adjustment under this Sub-Clause to be made and shall, at the request of the Engineer, furnish any invoices, accounts, documents or records so kept and such other information as the Engineer may require.
(e) Adjustment after Date of Completion Adjustment to the Contract Price, after the due date for completion of the whole of the Works pursuant to Clause 43, or after the date of completion of the whole of the Works certified pursuant to Clause 48, shall be made in accordance with
Current Rates or Current Prices, as applicable, ruling at the due date for completion or the date stated in the Taking-Over Certificate, whichever is the earlier. (f) Determination of Adjustment to Contract Price The amount of any adjust nient to the Contract Price pursuant to this Sub-Clause shall be determined by the Engineer in accordance with the foregoing rules.
EXAMPLE APPENDIX TO TENDER for use in conjunction with the second alternative. SPECIFIED MATERIALS MATERIAL
UNIT PRICE AND LOCA TION
TRANSPORT TO SITE
PRICE DELIVERED
REMARKS
TO SITE
Bitumen Diesel
Petrol Lubricants Cement
Reinforcing Steel
Explosives
NOTES: 1. The Contractor shall provide copies of quotations to substantiate all prices included in the above table. 2. All subsequent price substantiation shall be from the same source as original unless otherwise agreed by the Engineer.
3. The Contractor shall submit full explanation and provide substantiating documentation for the mode of transport to Site he proposes. Only the proposed documented mode of transport shall qualify for price adjustment.
(Note: Materials stated in the Appendix to Tender should be those of which substantial quantities are involved.)
'ç FIDIC 1987
The third alternative is suitable where price adjustment is to be made through the application of indices in a formula: Sub-Clause 70.1 — Increase or Decrease in Cost
EXAMPLE Delete the text of the Sub-Clause and substitute (a) Adjustments to the Contract Price in respect of rise and fall in the cost of labour and materials and other matters affecting the cost of execution of the Works shall be calculated for each monthly statement pursuant to Sub-Clause 60.1, the Statement at Completion pursuant to Sub-Clause 60.5 and the Final Statement pursuant to Sub-Clause 60.6 in accordance with the provisions of this Sub-Clause if there shall be any changes in the following Index figures compiled
by (insert details of source of indices) and published by (insert details of publication):(i) the Index of the cost of Labour in (insert name of country) (ii) the Index of the cost of (insert other factor, as relevant) (iii) the Index of the cost of (insert other factor, as relevant) (b) For the purpose of this Sub-Clause: (I) "Base Index Figure" shall mean the index figure applicable on the date 28 days prior to the latest date for submission of tenders. (ii) "Current Index Figure" shall mean the index figure applicable on the last day of the period to which the particular statement relates. Provided that in respect of any work the value of which is included in any such monthly statement (or Statement at Completion or Final Statement) and which was executed after the due date (or extended date)for completion of the whole of the Works, pursuant to Clause 43, the Current Index Figure shall be the
index figure applicable on the aforesaid due date (or extended date) for completion of the whole of the Works. (iii) "Effective Value" shall be the difference between: (a) The amount which is due to the Contractor under the provisions of Sub-Clauses 60.2, 60.5 or 60.8 (before deducting retention and excluding repayment of the advance payment) less any amounts for: work executed under nominated Subcon tracts materials and Plant on the Site, as referred to in Sub-Clause 60.1(c)
day works, variations or any other items based on actual cost or current prices, and bonuses (if any) adjustments under Clause 70,
and (b) The amount calculated in accordance with (b) (iii) (a) of this Sub-Clause and included in the last preceding statement.
(c) The adjustment to the Contract Price shall be calculated by multiplying the Effective Value by a Price Fluctuation Factor which shall be the net sum of the products obtained by multiplying each of the proportions given in paragraph (d) of this Sub-Clause by the following fraction: Current Index Figure — Based Index Figure
Base Index Figure calculated using the relevant index figures.
© FIDIC 1987
(d) For the purpose of calculating the Price Fluctuation Factor, the proportions referred to in paragraph (c) of this Sub-Clause shall (irrespective of the actual constituents of the work) be as follows: 0. in respect of labour (and supervision) costs subject to adjustment by reference to the Index referred to in (a) (i) of this Sub-Clause; 0. in respect of by reference to the Index referred to in (a) (ii) of this Sub-Clause; 0. in respect of by reference to me Index referred to in (a) (iii) of this Sub-Clause; 0.
in respect of all other costs which shall not be subject to any
adjustment; 1.00 Total (e) Where the value of an Index is not known at the time of calculation, the latest available value shall be used and any adjustment necessary shall be made in subsequent monthly statements. (Note: The number of indices included under (a) of this Sub-Clause may be varied, if it is determined that a different number of factors should be separately identified, and in such case (d) of this Sub-Clause must be altered to be consistent.)
Clause 72 Sub-Clause 72.2 — Currency Proportions
Where it is decided that the rate or rates of exchange shall be established from a source other than the Central Bank of the country, the Sub-Clause may be varied.
EXAMPLE Delete the words from 'prevailing...' to the end of the sentence and substitute 'stated in the Appendix to Tender'.
Clause 73 onwards Where circumstances require, additional Clauses may be added.
EXAMPLE CLAUSES (to be numbered, starting with Clause 73, as appropriate). Where the law applicable to the Contract does not cover bribery, the following example Clause may be added.
Bribes
.1
If the Contractor or any of his Sub-contractors, agents or servants offers to give or agrees to offer or give to any person, any bribe, gift, gratuity or commission as an inducement or reward for doing or forbearing to do any action in relation to
the Contract or any other contract with the Employer or for showing or forbearing to show favour or disfavour to any person in relation to the Contract or any other contract with the Employer, then the Employer may enter upon the Site and the Works and terminate the employment of the Contractor and the provisions of Clause 63 hereof shall apply as if such entry and termination had been made pursuant to that Clause.
Where circumstances require that particular confidentiality is observed, the following example Clause may be added.
CE)
FIDIC 1987
Details to be Confidential
.1 The Contractor shall treat the details of the Contract as private and confidential, save in so far as may be necessary for the purposes thereof, and shall not publish or disclose the same or any particulars thereof in any trade or technical paper or
elsewhere without the previous consent in writing of the Employer or the Engineer. If any dispute arises as to the necessity of any publication or disclosure for the purpose of the Contract the same shall be referred to the decision of the Employer whose award shall be final.
Where the Contract is being financed wholly or in part by an International Financing
Institution whose Articles require a restriction on the use of the funds provided, the following example Clause may be added.
Expenditure
.1 The Contractor shall not make any expenditures for the purpose of the Contract
Restricted
in the territories of any country which is not a member of (insert name of International Financing Institution) not shall he make any expenditure for goods produced in or services supplied from such territories. Where the Contractor may be a joint venture, the following example Clause may be
added.
Joint and Several Liability
.1 If the Contractor is a joint venture of two or more persons, all such persons shall be jointly and severally bound to the Employer for the fulfilment of the terms of
the Contract and shall designate one of such persons to act as leader with authority to bind the joint venture. The composition or the constitution of the joint venture shall not be altered without the prior consent of the Employer.
© FIDIC 1987
251-
PARTIJ— CONDITIONS OF PARTICULAR APPLICATION index Access to Data Accident Prevention Officer Accidents, Reporting of Additional Clauses Adverse Physical Obstructions or Conditions Alcoholic Liquor Arbitration Arms and Ammunition
Clause
11.2
34. 35. 73. 12.2 34. 67. 34.
Page
237 244 246 255 237 245 251
245
Bonus for Completion Boreholes and Exploratory Excavation
47.3 18.1
241
Burial of the Dead
34.0
245
Cash Flow Estimate to be Submitted
14.3
Changes in Cost and Legislation
70. 34. 9.1 21.1
237 252 244 236 242
15.2
241
Conditions of Labour and Rates of Wages Contract Agreement Contractor's Equipment, Insurance of Contractor's Representative, Language Ability of Currency of Account and Rates of Exchange Currency Proportions
60. 72.2
247
250
Data, Access to Default of Employer
11.2
256 237
69.1
251
Disorderly Conduct
34. 5.2
245 235 245
Documents, Order of Precedence Drugs
34.
Employer, Name and Address Employment of Local Personnel Employment of Persons in Service of Others Engineer, Name and Address Engineer's Duties Environment, Protection of
1.1 16.4 34. 1.1 2.1
235
19.1
241
Epidemics
34.
245
Exploratory Excavation and Boreholes Extension of Defects Liability
18.1
241
49.5
Foodstuffs, Supply of
31.2 34. 34.
248 244 245 245
Health and Safety of Staff and Labour Housing for Labour
34. 34.
245 244
Facilities for Other Contractors Festivals and Religious Customs
Inspection of Site Insurance of the Works and Contractor's Equipment Insurances Arranged by the Employer
241
244 235 235
11.1
237 242 21, 242 23 & 25 242,243 21.1
Interpreter to be made Available
15.2
241
Labour, Conditions of and Rates of Wages Labour, Health and Safety Labour, Housing for Labour, Rates of Wages and Conditions Labour, Repatriation of Labour, Special Provision for
34. 34. 34. 34.
244 244 244 244 244 244
Language, Ability of Contractor's Representative
34. 34. 15.2
241
Index Language, Ability of Superintending Staff Language, Ruling Language/s Law Applicable
Local Personnel, Employment of Measures
Against Insect and Pest Nuisance
Page
16.3
241
5.1 5.1 5.1
235 235 235
16.4
241
34.
245 248 249
No Remedying of Defects in Dredging Work after Completion No Responsibility for Cost of Searching of Dredging Work Notice to Employer and Engineer
49.5 50.2 68.2
Other Contractors, Facilities for Other Contractors, Opportunities for
31.2
Payments to Contractor Payments to Employer Performance, Example of Security Bond for
Physical Conditions or Obstructions, Adverse Place of Payment Power of Engineer to Fix Rates Prevention from Testing
60. 60. 10.1 10.1 10.1 10.4 12.2 60. 52.2 48.5
Programme to be Submitted Protection of the Environment
14.1 19.1
Rates of Exchange Rates of Wages and
60. 34. 35.
Performance Guarantee, Example Performance Security Performance Security, Source of
Conditions of Labour Records of Safety and Health Religious Customs and Festivals Repatriation of Labour Reporting of Accidents Revesting and Removal of Contractor's Equipment, Temporary Works and Materials Royalties Safety, Security and Protection of the Environment Security, Safety and Protection of the Environment Site, Inspection of Source of Performance Security
Staff, Health and Safety of Submission of Cash Flow Estimate Submission of Programme Superintending Staff, Language Ability of Supply of Foodstuffs Supply of Water Surety Bond for Performance, Example of Suspension of Work
2q
Clause
31.1
251
244 244 249 249 236 236 236 237 237
249 249 247 237 241
35.
249 244 246 245 244 246
54.5 28.2
249 243
19.1 19.1 11.1
241 241
34.
34.
10.4 34. 14.3 14.1
237 237 244 237 237
16.3 34. 34.
241
10.1 40.1
236 246
Testing, Prevention from Time for Completion
48.5 43.1
247 246
Valuation of Variations Variations Variations Exceeding 15 per cent
52.1 51.1
248 248
Vesting of Contractor's Equipment, Temporary Works and Materials
52.3 54.2
249 249
Water, Supply of Working Hours Works, Insurance of
34. 45.1 21.1
245 246 242
245 245
EDITORIAL AMENDMENTS Following publication in 1987 of the Fourth Edition of the Conditions of
Contract for Works of Civil Engineering Construction, a number of editorial amendments were agreed by FIDIC. The amendments have been incorporated
during reprinting and the list below clarifies the differences between this copy and the original document.
Page 236
Clause 9. The words 'as stated in Sub-Clause 9.1 of Part 1 of these Conditions'
Page 237
Sub-Clause
Page 238
Example performance guarantee. A comma previously appeared between the
Page 243
Page 244
have been added to the final line of the first paragraph.
12.2. A comma has been moved from after the word 'words' to
immediately before the word 'other'. The word 'Site' has been capitalised.
words 'and' and 'complete' in the third line of the paragraph beginning
'Whereas'. The fifth line of the paragraph beginning 'Now the Condition . . .' previously read'. . . default by the Contract. . Sub-Clause 21.3. (b) (ii). A full stop has been inserted following '50'. Sub-Clause 34. Repatriation of Labour. A comma has been inserted between the words 'country)' and 'shall'.
Page 245
Sub-Clause 34. Epidemics. The word 'Contractor' has been capitalised in the first
Page 246 Page 248
Sub-Clause 40.3. This wa previously incorrectly listed as 40.2.
Page 251 Line 21
line. Sub-Clause 34. Alcoholic Liquor or Drugs. The word 'Contractor' has been capitalised in the first line. Sub-Clause 49.5. The last line of the first paragraph previously read'. . . extend
beyond 730 days'. Sub-Clause 67.3. The word 'a' previously appeared before the bracket on the penultimate line of the Example. Sub-Clause
70.2. A comma has been moved from after the word 'words' to
immediately before the word 'other'.
